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AUTHORS'   EDITION 

No.        30 
PRINTED   FOR 

B.  E.  FERNOW, 

CHIEF   UNITED    STATES   DIVISION   OF    FORESTRY. 


The  Author's  Edition  is  limited  to 
One  Hundred  Copies,  one  copy  for 
each  Contributor. 


ONE  HUNDRED  YEARS  OF 
AMERICAN  COMMERCE 


f  Reproduced  from  the  painting  by  filbert  Oftuatt,  in  the  Sffiettopolitan  SJBuMum  of  &tj,rt. 
with  the  permiaaion  of  the  owner,  fff&r.  &3,uqu.atu.i  ^jay. 


Entered  according  to  Act  of  Congress,  in  the  year  1895,  by 

D.  O.  HAYNES  &  Co. 
In  the  office  of  the  Librarian  of  Congress,  at  Washington. 


ALL  RIGHTS   RESERVED. 


'775700 


THE  DE  VINNE  PRESS,    NEW-YORK. 


EDITOR'S   PREFACE 

THIS  volume  illustrates  the  dignity  of  labor,  the  beneficence  of  liberty,  and  the 
triumphs  of  invention.  It  is  an  epic  on  the  marvels  of  intelligent  work.  The 
wonders  of  the  material  development  of  the  most  remarkable  of  the  centuries  of 
recorded  time  are  exhibited  in  this  gallery  of  pen -pictures.  They  are  the  word- 
paintings  of  artists,  each  eminent  in  his  own  department  of  beneficent  industry.  It 
is  an  American  story;  but  the  United  States  is  the  most  conspicuous  illustration  and 
example  of  the  nineteenth  century  and  its  results.  Peace  and  free  institutions  have 
furnisjied  the  opportunity  for  individual  efforts.  States  constructed,  cities  founded, 
wildernesses  settled,  and  vast  populations  prosperous  in  varied  industries  are  the  rich 
contributions  of  our  country  to  the  world's  progress  in  the  past  hundred  years. 
Capital  and  labor  have  caused  and  shared  this  creation  of  power  and  production, 
and  this  volume,  which  is  an  encyclopedia  of  industrial  development  for  a  century, 
written  by  business  men,  is  appropriately  dedicated  to  the  business  men  of  America. 

C.  M.  D. 


PUBLISHERS'    INTRODUCTION 

THE  evolution  of  an  idea  is  always  interesting.  In  submitting  to  the  public  this  history 
of  American  commerce,  an  explanation  of  the  causes  in  which  it  had  its  inception  may  most 
properly  premise  a  review  of  the  finished  work.  The  present  year  marked  for  the  oldest 
commercial  paper  in  America,  the  "  Shipping  and  Commercial  List  and  New  York  Price  Cur- 
rent," the  completion  of  one  hundred  years  of  useful  existence.  In  seeking  some  method  of 
celebrating  the  centennial  in  a  manner  worthy  at  the  same  time  of  the  paper  and  of  the  busi- 
ness interests  of  the  country,  the  present  idea  was  evolved.  It  was  decided  that  in  no  better 
way  could  service  be  rendered  to  the  American  commercial  community  than  by  gathering 
together  in  compact  form  the  interesting  facts  of  its  remarkable  development.  At  first  the 
intention  was  to  present  this  history  in  a  centennial  edition  of  the  paper,  and  upon  this  plan 
the  work  was  begun.  Then,  as  in  the  end,  the  plan  contemplated  the  publication  of  one 
hundred  chapters,  written  by  one  hundred  men  representing  the  great  lines  into  which  our 
trade  and  industries  had  been  developed  and  specialized  in  recent  years.  The  suggestion  of 
such  a  work  met  with  most  generous  welcome  in  the  business  world.  Its  need  was  recognized 
at  once,  and  its  novelty  and  value  elicited  eminent  aid.  The  very  success  of  the  idea  compelled 
the  changing  of  the  original  plan.  In  the  form  of  a  newspaper  publication  the  work  would 
have  lacked  permanence  and  breadth  of  scope.  It  seemed  almost  unfair  to  interest  representa- 
tive men  throughout  the  country,  who  would  bring  enthusiasm,  ability,  and  experience  to  the 
work  of  describing  the  industries  of  the  country,  and  then  to  place  upon  them  limitations  of 
space  within  which  they  could  do  justice  neither  to  themselves  nor  to  their  subjects.  More- 
over, it  was  not  solely  as  a  newspaper  centennial  that  the  event  was  of  importance ;  it  had  a 
deeper  and  more  extended  historical  significance.  Like  the  "  Shipping  and  Commercial  List" 
itself,  the  centennial  to  be  celebrated  was  but  the  natural  outcome  of  a  great  event  in  the 
history  of  our  establishment  as  a  nation. 

In  the  year  1795  there  was  ratified  by  the  Senate  of  the  United  States,  and  formally 
approved  by  President  Washington,  a  treaty  of  amity,  commerce,  and  navigation  with  Great 
Britain.  This  treaty,  negotiated  by  John  Jay,  of  New  York,  as  envoy  extraordinary,  secured 
to  this  country  a  commercial  liberty  commensurate  with  its  position  of  national  independence, 
as  recognized  in  the  treaty  of  peace  twelve  years  before.  It  conceded  the  actuality  of  the 
national  existence,  and  implied  conviction  as  to  its  permanence.  Above  all,  it  averted  the 
almost  certain  disaster  of  a  war,  then  imminent,  between  the  two  countries.  The  confidence 
it  inspired  in  the  business  world  by  its  recognition  of  this  country  as  a  treaty  power,  and 


yiii  ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 

the  immediate  advantages  it  brought  to  our  commerce,  are  shown  in  the  fact  that  the  foreign 
trade  of  the  United  States  almost  doubled  in  the  single  year  following  its  making.  Arranged 
at  a  time  when  the  American  people  were  smarting  under  a  sense  of  bitter  wrong  inflicted 
by  Great  Britain,  the  many  advantages  obtained  by  the  Jay  treaty  were  not,  at  first,  fully 
appreciated.  Political  partizanship  attacked  it  blindly,  and  the  great  party  then  clamoring  for 
an  alliance  with  France  denounced  it  fiercely.  In  its  support,  the  calmer  counsels  of  such  great 
statesmen  as  Washington  and  Hamilton,  representing  the  conservative  and  substantial  elements 
of  the  nation,  finally  prevailed,  and  the  treaty  was  adopted.  Time  has  too  fully  demonstrated 
the  wisdom  of  this  action  to  make  necessary  a  further  discussion  of  the  long-since-refuted 
arguments  by  which  the  consummation  of  the  treaty  was  opposed.  The  era  it  ushered  in  was 
for  the  nation  one  of  progress  and  prosperity  unprecedented. 

The  opportunity  to  celebrate  the  centennial  of  our  oldest  commercial  paper  as  well  as  that 
of  our  country's  commercial  progress  naturally  spurred  us  on  to  the  highest  possible  attain- 
ment. It  was  determined  to  have  nothing  ephemeral  or  meretricious  about  the  publication,  and 
to  make  it,  not  a  newspaper  issue,  but  a  standard  book  of  reference,  prepared  under  the  best 
literary  guidance  and  made  with  the  best  mechanical  skill.  The  opportunity  was  in  every  way 
worthy  of  the  undertaking,  for  in  addition  to  the  commemoration  of  commercial  liberty  there 
was  demanded  a  permanent  and  authentic  record  of  the  results  accomplished  through  this 
liberty.  Properly  produced,  such  a  history  of  American  commerce  would  not  only  do  long- 
delayed  justice  to  the  memory  of  the  patriots  of  one  hundred  years  ago,  but  would  apprecia- 
tively recognize  the  men  who  by  their  industry  and  genius  have  aided  in  the  industrial  advance 
of  this  country,  and  would  provide  for  the  present  and  the  future  a  source  of  inspiring  and 
stimulating  knowledge  of  the  grandeur  of  American  achievement.  It  was  to  this  end  that  this 
history  of  American  commerce,  as  it  now  appears,  was  undertaken,  and  in  this  spirit  the  work 
has  been  carried  on  throughout.  The  incentive  and  the  material  were  at  hand,  and  the  men 
whose  influence  had  directed  our  commercial  activities  in  the  crowning  years  of  the  century  were 
still  here  to  aid  in  making  the  work  authentic  and  complete. 

These  considerations  were  presented  to  Hon.  Levi  P.  Morton,  Governor  of  the  State  of  New 
York,  and  to  Dr.  Chauncey  M.  Depew.  Governor  Morton  at  once  Accepted  the  assignment  of 
"  American  Banking,"  and  Dr.  Depew  generously  consented  to  edit  the  entire  work.  From 
this  time  the  success  of  the  undertaking  was  assured.  The  merits  of  the  plan  impressed  the 
leaders  in  other  lines  of  industry,  and  the  most  generous  cooperation  followed.  In  choosing 
the  men  to  contribute  the  various  articles,  the  editorial  committee,  to  whom  was  delegated  the 
authority  of  selection,  considered  but  one  question :  Was  each  fitted  by  ability  and  experience 
to  represent  the  industry  with  which  he  was  identified  ?  No  other  question  entered  into  the 
matter.  Political  considerations  were  especially  avoided.  The  work  was  to  be  simply  a 
magazine  of  facts  collated  by  men  who  knew  their  significance,  and  made  interesting  with  the 
vitality  of  actual  experience, —  a  book  about  business,  by  business  men,  for  business  men, —  a 
record  of  events  in  the  departments  of  enterprise  and  production,  with  such  reference  to  causes 
and  conditions  as  should  be  necessary  to  describe  intelligently  those  events. 

If  the  need  of  such  a  history  was  understood  before,  it  certainly  became  more  impressive 
as  the  work  upon  the  book  progressed.  For  a  century  the  commercial  history  of  the  United 
States  had  remained  unwritten,  and  records  such  as  the  compiler  of  political  and  universal 


ONE    HUNDRED   YEARS   OF   AMERICAN   COMMERCE  U 

history  finds  preserved  for  his  reference,  were  not  obtainable  for  a  work  of  this  character.  They 
were  scattered,  incomplete  and  often  conflicting,  through  every  conceivable  channel,  from  the 
old  ledger  entries  of  long-forgotten  firms  to  the  modern  monographs  in  the  files  of  periodical 
publications.  The  wisdom  of  dividing  the  work  into  one  hundred  chapters  written  by  one 
hundred  contributors  now  received  corroboration  anew.  Upon  no  other  plan  could  the  data 
essential  to  the  work  have  been  gathered ;  nor  by  any  other  means  could  the  publication  have 
obtained  that  historical  accuracy  and  standard  of  authenticity  which  a  work  of  this  kind  must 
possess  to  have  permanent  value.  No  one  historian,  however  industrious  or  versatile,  could 
have  written  "  One  Hundred  Years  of  American  Commerce."  Only  by  the  cooperation  of  the 
leaders  in  every  branch  of  industry  treated  could  the  desired  results  have  been  obtained,  and  it 
is  here  due  to  the  writers  of  this  book  to  state  that,  chosen  as  they  have  been  from  the  ranks 
of  the  busiest  men  of  to-day,  they  have  still  found  time  cheerfully  and  ably  to  cooperate  for 
the  patriotic  purposes  of  this  history  of  American  commerce.  In  order  that  the  reader  may 
understand  something  of  the  plan  upon  which  the  work  was  written  by  these  contributors, 
we  quote  from  the  first  letter  of  suggestions  sent  out  by  the  editorial  committee  in  charge 
of  the  work : 

"  As  to  the  character  of  the  work.  In  the  varied  individuality  of  style,  naturally  resultant 
upon  so  many  contributors,  we  hope  to  escape  that  dullness  of  machine-made  history  which 
keeps  so  many  otherwise  useful  volumes  unread.  Therefore  upon  every  contributor  we  would 
impress  the  fact  that  he  should  not  sacrifice  his  personal  style  or  preferences.  It  is  not  the 
encyclopedic  knowledge  of  the  pedant  that  the  world  wants  to-day.  It  is  the  living  acquain- 
tance with  men  and  things,  causes  and  effects,  that  shall  show  what  is  and  the  promise  of  what 
is  to  be.  The  information  that  every  successful  man  has  of  his  own  business  is  of  greater  value 
than  the  statistics  of  the  records.  In  our  work  we  desire  to  bring  the  man  and  the  records 
together,  and  to  have  him  show  the  meaning  of  the  records  in  the  light  of  his  personal  and 
practical  knowledge.  Is  this  to  be  a  statistical  or  a  descriptive  work?  is  an  important  question 
that  has  been  asked.  Are  the  articles  to  be  nearly  all  statistics,  and  is  the  progress  in  the 
various  lines  to  be  shown  by  figures  or  by  words?  The  answer  is  that  this  is  to  be  both  a 
statistical  and  a  descriptive  work ;  but  the  statistics  are  to  be  subordinated  to  the  description, 
or  not  used  at  all  unless  they  are  necessary  to  the  description.  Description  without  statistics 
would  have  no  force ;  statistics  without  description  would  be  meaningless  to  many.  The  union 
of  the  two  in  the  hands  of  men  who  know  the  significance  of  the  statistics  they  cite  will  give 
these  articles  their  interest  and  weight.  In  dealing  with  branch  or  allied  subjects  pertinent  to 
the  article  under  discussion,  contributors  are  recommended  merely  to  summarize  the  cognate 
subject  briefly  and  with  special  reference  to  its  application.  There  are  so  many  ramifications  of 
every  great  industry  that  to  attempt  to  follow  more  than  the  main  story  would  be  impossible. 
To  conform  to  the  centennial  feature  of  the  work,  it  has  been  decided  to  limit  the  number  of 
chapters  to  one  hundred.  A  history  of  '  one  hundred  years  of  American  commerce,  in  one 
hundred  chapters,  by  one  hundred  Americans,'  has  the  ring  of  a  slogan  of  success.  And  the 
men  in  charge  of  this  work  will  keep  constantly  before  their  minds  not  only  the  making  of  the 
work,  but  the  making  it  of  such  a  nature  that  business  men  will  not  only  need  but  want  it.  A 
strong,  accurate,  and  true  record,  as  well  as  an  attractive  one,  is  the  aim." 

The  policy  persistently  observed  has  been  studiously  to  refrain  from  interfering  with  either 


i  ONE   HUNDRED  YEARS   OF   AMERICAN   COMMERCE 

the  style  or  method  of  treatment  by  which  each  writer  has  stamped  his  own  individuality  upon 
his  work.  The  editors  have  attempted  no  greater  uniformity  than  that  which  was  necessary  to 
prevent  extended  and  useless  duplication  in  allied  subjects.  If,  therefore,  the  reader  of  this 
book  finds  that  its  chapters  are  not  always  uniform  in  length  or  treatment,  he  is  but  noting  the 
differences  which  must  exist  in  literary  work  among  one  hundred  men.  In  these  very  differ- 
ences exists  one  of  the  most  interesting  and  most  effective  phases  of  the  history.  In  presenting 
the  book  herewith  it  is  only  necessary  to  add  that  each  article  bears  the  trade-mark  of  its 
quality  in  the  signature  of  its  contributor.  When  it  is  further  recalled  that  actual  personal 
knowledge  covering  from  one  half  to  two  thirds  of  the  century  under  discussion,  and  directly 
received  but  hitherto  unpublished  oral  tradition  concerning  the  remainder,  are  possessed  by  the 
majority  of  the  relators,  the  present  work  has  had  sufficient  testimony  to  its  worth.  The  figures 
accompanying  each  article  are  such  as  are  deemed  the  most  authentic,  and  have  been  derived 
from  every  available  source.  In  the  frequent  preference  given  to  the  reports  of  the  United 
States  census  the  writers  have  taken  the  stand  that,  however  imperfect  these  may  have  been 
found  in  certain  particular  instances,  they  are  still,  taken  collectively  and  with  due  regard  to 
their  official  nature,  the  soundest  basis  for  comparisons  covering  extended  periods.  Where 
particular  trades  have  preserved  their  own  records,  and  these  have  been  considered  reliable, 
figures  have  been  based  upon  them,  while  in  other  instances  special  statistics  personally 
compiled  by  the  writer  have  been  given.  In  all  these  cases  the  figures  given  are  considered 
the  most  authentic  by  the  writers,  and  this  judgment  by  them  must  be  the  support  for 
their  accuracy. 

The  method  pursued  in  dividing  the  work  into  its  one  hundred  chapters  so  as  both  to 
comprehend  and  to  distinguish  all  the  great  factors  in  the  industrial  activities  of  the  country 
will  be  apparent  upon  examination  of  the  Table  of  Contents.  Beginning  with  great  national 
interests,  as  banking  and  interstate  commerce,  the  classification  follows  through  the  great 
corporate  subdivisions  of  industry, — as  the  telegraph,  ship-building,  newspapers, —  then  through 
the  products  of  the  earth  —  as  cotton,  rice,  and  sugar — and  our  natural  resources, —  as  mines, 
live  stock,  etc., —  and  so  on  down  through  the  long  list  of  manufactures  in  which  the  genius  of 
America  has  been  shown,  to  the  mercantile  activities  comprised  under  the  various  trades.  The 
chapter  numbered  XCIX,  "  Other  Industries,"  was  introduced  to  provide  representation  for 
other  more  or  less  important  industrial  factors  not  elsewhere  treated. 

The  editorial  management  of  the  history,  under  Dr.  Depew,  has  been  conducted  by  Mr. 
Thomas  C.  Quinn.  Of  the  associate  editors  whose  work  deserves  mention  are  Mr.  Wesley  W. 
Pasko,  Mr.  William  Douglas  Willes,  and  Mr.  Charles  Frederick  Stansbury.  Mention  should 
be  made  also  of  the  work  of  Mr.  John  Winfield  Scott,  whose  wide  acquaintance  and  patriotic 
labors  did  much  toward  making  possible  the  final  successful  result.  For  the  typographical 
excellence  of  the  book-maker's  art  evidenced  in  this  volume,  credit  is  due  to  the  De  Vinne 
Press,  to  whose  reputation  for  elegance  and  fine  work  little  can  be  added.  The  art  work  of 
the  history  was  placed  in  charge  of  the  artist  William  C.  Smith,  of  whose  skill  many  of  the 
portraits  in  this  work  give  evidence.  The  engraving  of  the  portraits  drawn  by  Mr.  Smith,  as 
well  as  the  reproduction  of  the  other  portraits,  was  done  by  the  Gill  Engraving  Company. 
Words  of  recognition  are  also  due  to  the  L.  L.  Brown  Paper  Company,  of  Adams,  Mass.,  for 
their  care  in  the  manufacture  of  the  hand-made  paper  for  the  authors'  edition  of  the  history. 


ONE   HUNDRED   YEARS   OK   AMERICAN    COMMERCE 


li 


One  result  of  the  work  upon  this  history  which  was  not  directly  foreseen  when  the  project 
was  conceived  has  been  the  setting  aside  of  December  igth  as  "  Commercial  Day,"  in  honor  of 
the  centennial  of  American  commercial  liberty,  and  in  recognition  from  year  to  year  hereafter 
of  the  beneficent  results  of  American  industry  and  enterprise  which  this  history  of  American 
commerce  both  demonstrates  and  commemorates.  The  idea  of  this  celebration  came  to  Dr. 
Depew  through  his  editorial  work  on  this  history.  His  suggestion  of  Commercial  Day  has 
already  been  taken  up  throughout  the  country.  The  Chamber  of  Commerce  and  the  Board  of 
Trade  of  New  York  led  off  in  the  movement.  In  the  resolutions  passed  by  the  Chamber  of 
Commerce  their  leadership  in  the  promotion  of  Commercial  Day  was  most  strikingly  justified 
by  allusion  to  the  fact  that  it  was  the  solid  men  of  New  York,  as  represented  by  the  Chamber 
of  Commerce  one  hundred  years  ago,  who,  uninfluenced  by  partizan  clamor,  came  to  the  assis- 
tance of  President  Washington  in  securing  calmer  consideration  for  the  Jay  treaty.  Commercial 
Day  this  year  will  be  celebrated  with  a  banquet  in  New  York  at  Delmonico's,  given  under  the 
auspices  of  the  editors  and  contributors  to  this  history  of  American  commerce,  and  to  which 
have  been  invited  representative  business  men  in  all  lines  of  industry  and  from  all  sections  of 
the  country.  Chambers  of  Commerce  and  Boards  of  Trade  throughout  the  country,  following 
the  example  set  by  New  York,  will  commemorate  the  day  with  appropriate  exercises.  From 
1895,  the  centennial  of  American  commercial  liberty,  will  date  Commercial  Day,  devoted  to 
the  interests  of  American  trade  and  to  renewing  from  year  to  year  the  vigor  of  our  national 
patriotism  and  enterprise. 

In  the  closing  days  of  the  work  on  this  history  the  painful  news  of  the  death  of  Mr. 
Frederic  Gunther  was  received.  Only  a  few  days  before  his  death  Mr.  Gunther  had  revised 
the  proof  of  his  article  on  the  fur  trade  for  the  history.  This  contribution  from  his  experience 
will  remain  to  testify  to  his  ability  and  the  success  of  his  business  career. 

We  must  finally  express  our  deep  sense  of  obligation  to  the  one  hundred  Americans  who 
have  cooperated  in  the  production  of  this  history,  and  to  whose  enthusiasm,  experience,  and 
ability  it  is  a  lasting  monument.  That  our  part  has  been  done  in  a  manner  which  shall  be 
considered  worthy  of  them  and  of  the  commercial  interests  of  our  country  is  the  highest  praise 
for  which  we  hope. 

THE  PUBLISHERS. 

December  10,  1895. 


CONTENTS 


CHAPTER 

I  AMERICAN    BANKING    . 


2  AMERICAN   LABOR 

3  IMPORTS  AND   EXPORTS 

4  INTERSTATE  COMMERCE 


LEVI  P.  MORTON,  Governor  of  the  State  of  New  York     . 


CARROLL  D.  WRIGHT,  LL.D.,  Washington,  D.  C., 

United  States  Commissioner  of  Labor     1  1 

WORTHINGTON  C.  FORD,  Washington,  D.  C., 

Chief  United  States  Bureau  of  Statistics     20 

EDWARD  A.  MOSELEY,  Washington,  D.  C., 

Secretary  Interstate  Commerce  Commission      25 


5  THE   POSTAL  SERVICE   IN   COMMERCE     .     THOMAS  L.  JAMES,  New  York, 

President  Lincoln  National  Bank,  and  Ex-Postmaster-General    33 


6  OUR  MERCHANT  MARINE   . 


EUGENE  T.  CHAMBERLAIN,  Washington,  D.  C., 

United  States  Commissioner  of  Navigation     38 

7  OUR  COMMERCIAL  WEALTH  AND  VOLUME  OF  BUSINESS,  CHARLES  F.  CLARK,  New  York, 

President  The  Bradstreet  Company      42 

47 


8  THE  CORPORATION   IN  COMMERCE  .         .     Col.  WILLIAM  JAY,  New  York 

9  COMMERCIAL   ORGANIZATIONS  . 

10  ONE   HUNDRED  YEARS  OF   NEW  YORK  COMMERCE,  General  HORACE  PORTER,  LL.D.,  New  York         55 


.    ALEXANDER  E.  ORR,  New  York, 

President  New  York  Chamber  of  Commerce     50 


11  OUR  FOREIGN  TRADE  FROM  A  TRADER'S  STANDPOINT,  CHARLES  R.  FLINT,  New  York, 

Flint  Eddy  &*  Co.,  Merchants     63 

12  WALL    STREET JOHN  P.  TOWNSEND,  LL.D.,  New  York, 

President  Bowery  Savings  Bank      67 


13  ADVERTISING  IN  AMERICA 

14  FIRE  AND   MARINE  INSURANCE 

15  LIFE  INSURANCE    .... 

16  AMERICAN  RAILROADS 

17  AMERICAN   CAR-BUILDING  . 

18  AMERICAN   SHIP-BUILDING 


FRANCIS  WAYLAND  AYER,  Philadelphia,  N.  W.  Ayer  &  Son     76 
HENRY  H.  HALL,  New  York,  Hall  &  Ifenshaw          .         .      84 


SHEPPARD  HOMANS,  New  York, 

First  President  Actuarial  Society  of  America,  and 
Corresponding  Member  Land.  Inst.  of  Actuaries     91 

STUYVESANT  FISH,  New  York, 

President  Illinois  Central  Railroad     98 

JAMES  MCMILLAN,  Detroit, 

United  States  Senator  from  Michigan    1 13 

CHARLES  H.  CRAMP,  Philadelphia, 

President  William  Cramp  &  Sons 
Ship  and  Engine  Building  Co.    1 19 


xiv  ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 

CHAPTER  PAGE 

19  THE  TELEGRAPH General  THOMAS  T.  ECKERT,  New  York, 

President  Western  Union  Telegraph  Co.   125 

20  THE  TELEPHONE  .        .        .        .        .        .    JOHN  E.  HUDSON,  Boston, 

President  American  Bell  Telephone  Co,   133 

21  THE  EXPRESS          .        .        .        .        .        .     LEVI  C.  WEIR,  New  York, 

President  Adams  Express  Company    137 

22  THE  STREET  RAILWAYS  OF  AMERICA     .     HERBERT  H.  VREELAND,  New  York, 

President  Metropolitan  Traction  Company    141 

23  THE  HOTELS  OF  AMERICA         .         .         .     HIRAM  HITCHCOCK,  New  York, 

Hitchcock,  Darling  &  Co.,  Proprietors  Fifth  Avenue  Hotel    149 

24  AMERICAN  THEATERS ALBERT  M.  PALMER,  New  York,  Proprietor  Palmer's  Theater    157 

25  AMERICAN  NEWSPAPERS     ....     General  CHARLES  H.  TAYLOR,  Boston, 

Editor  and  Managing  Proprietor  Boston  Globe    166 

26  THE  AMERICAN  TRADE  AND  TECHNICAL  PRESS,  DAVID  WILLIAMS,  New  York, 

Publisher  and  Proprietor  The  Iron  Age    1 74 

27  AMERICAN  MINES RICHARD  P.  ROTHWELL,  New  York, 

Editor  The  Engineering  and  Mining  Journal    178 

28  AMERICAN  QUARRYING       ....     REDFIELD  PROCTOR,  Proctor,  Vt, 

United  Slates  Senator  from  Vermont    188 

29  POWDER  AND   EXPLOSIVES         .        .         .     FRANCIS  G.  ouPoNT,  Wilmington,  Del 192 

30  AMERICAN  LUMBER BERNHARD  E.  FERNOW,  Washington,  D.  C., 

Chief  Division  of  Forestry,  U.  S.  Department  of  Agriculture    196 

31  PETROLEUM:    ITS   PRODUCTION  AND   PRODUCTS,  HENRY  C.  FOLGER,  Jr.,  A.  M.,  LL.B.,  New  York, 

Standard  Oil  Company    204 

32  AGRICULTURAL  PRODUCTS       ^f       .         .     GEORGE  E.  MORROW,  Stillwater,  Oklahoma, 

President  Oklahoma  Agricultural  and  Mechanical  College, 
,,_„-_  and  Director  Agricultural  Experiment  Station    215 

33  AMERICAN   LIVE   STOCK      ....     LAZARUS  N.  BONHAM,  Oxford,  Ohio, 

Ex-Secretary  Ohio  Slate  Board  of  Agriculture    22O 

34  AMERICAN   COTTON RICHARD  H.  EDMONDS,  Baltimore, 

Founder  and  Editor  Manufacturers'  Record   231 

35  AMERICAN  WOOL WILLIAM  LAWRENCE,  A.  M.,  LL.D.,  Bellefontaine,  Ohio, 

President  National  Wool  Growers'  Association,  and 

President  Ohio  Wool  Growers'  Association    216 

36  AMERICAN  HORTICULTURE         .        .        .     ALFRED  HENDERSON,  New  York,  Peter  Henderson  &  Co.    .    248 

37  AMERICAN  SUGAR JOHN  E.  SEARLES,  New  York, 

Secretary  and  Treasurer  American  Sugar  Refining  Company    257 

38  AMERICAN  RICE JOHN  F.  TALMAGE,  New  York,  Dan  Talmage's  Sons   .         .    262 

39  AMERICAN  FLOUR CHARLES  A.  PILLSBURY,  Minneapolis, 

Pillsbury.  Washburn  Flour  Mills  Company    266 

40  AMERICAN   GLASS  INTERESTS    .        .         .    JAMES  GILLINDER,  Philadelphia, 

President  Gillinder  &  Sons,  Incorporated    274 

41  AMERICAN  POTTERIES          ....    JOHN  MOSES,  Trenton,  N.  J., 

President  The  John  Moses  &°  Sons  Company    285 

42  AMERICAN  GAS  INTERESTS         .        .        .     EMERSON  McMiLLiN,  New  York,  Emerson  McMillin  &•  Co.   295 

43  AMERICAN  PAPER  MILLS    ....     WARNER  MILLER,  Herkimer,  N.  Y., 

Her/timer  Paper  Company    302 

44  AMERICAN   PUBLISHING       .         .         .         .     JOHN  W.  HARPER,  New  York,  Harper  &•  Brothers     .         .    308 

45  AMERICAN  PRINTING  ....     THEODORE  L.  DE  VINNE,  New  York,  The  De  Vinne  Press     314 

46  THE  IRON  AND  STEEL  INDUSTRY     .  .     CHARLES  HUSTON,  Coatesville,  Pa., 

President  Lukens  Iron  and  Steel  Company    320 


ONE   HUNDRED   YEARS   OF   AMERICAN    COMMERCE 


CHAPTER 

47  COPPER  AND  BRASS 


XT 

UMi 
.     ALFRED  A.  COWLES,  New  York, 

Vice-I'resident  Antonio  Bran  and  Copper  Company    339 

48  LOCOMOTIVE  AND  ENGINE  WORKS  .     ALBA  B.  JOHNSON,  Philadelphia,  Baldwin  Locomotive  Works    337 

MACHINERY   MANUFACTURING   INTERESTS,  WILLIAM  SELLERS,  Philadelphia, 

President  and  Engineer  William  Sellers  &•  Co.,  Incorporated  346 

AGRICULTURAL  MACHINERY  AND  IMPLEMENTS,  V^RIDGE  M-  FOWLER  Chicago, 

Vite-1'resident  McCormick  Harvesting  Machine  Company   352 

STOVES  AND  HEATING  APPARATUS  .         .     JEREMIAH  DWYER,  Detroit, 

President  Michigan  Stave  Company    357 

PLUMBERS  AND  STEAM-FITTERS'  SUPPLIES,  JORDAN  L.  MOTT,  New  York, 

President  J.  L.  Matt  Iron  Workt    364 


53  BUILDING  MATERIALS 


.     WILLIAM  H.  JACKSON,  New  York, 

President  Jackson  Architectural  Iron  Works    371 


54  ELECTRICAL  MANUFACTURING  INTERESTS,  THOMAS  COMMERFORD  MARTIN,  New  York, 

Editor  The  Electrical  Engineer    377 


55  THE  PACKING  INDUSTRY 

56  AMERICAN  FISH  FOODS      . 

57  AMERICAN  CANNING  INTERESTS 

58  AMERICAN  WINES 

59  AMERICAN  DISTILLERIES  . 

60  THE  BREWING  INDUSTRY  . 

61  AMERICAN  TOBACCO  FACTORIES 

62  AMERICAN  SOAP  FACTORIES      . 

63  THE  CHEMICAL  INDUSTRY 

64  THE  LEAD  INDUSTRY  . 

65  THE  SALT  INDUSTRY  . 

66  THE  BISCUIT  INDUSTRY     . 

67  THE  COTTONSEED  OIL  INDUSTRY 

68  THE  STARCH  INDUSTRY     . 

69  THE  MATCH  INDUSTRY      . 

70  THE  ICE  INDUSTRY      . 

71  SODA  FOUNTAINS 

72  AMERICAN  TEXTILE  MILLS 

73  AMERICAN  CARPETS    . 

74  THE  CORDAGE  INDUSTRY 


PHILIP  D.  ARMOUR,  Chicago,  Armour  &•  Co. 


•    383 


EUGENE  G.  BLACKFORD,  New  York, 

Ex-Commissioner  of  Fisheries   389 

EDWARD  S.  JUDGE,  Baltimore, 

Editor  The  Trade,  and  Secretary  National 

Association  of  Canned  Food  Packers    396 
CHARLES  CARPY,  San  Francisco, 

President  California  Wine  Association    401 

JAMES  E.  PEPPER,  Lexington,  Ky.,  James  E.  Pepper  cV  Co.   .    407 
FRED  PABST,  Milwaukee,  President  Pabst  Brewing  Co.  .    413 

PIERRE  LORILLARD,  Junior,  New  York, 

President  P.  Lorillard  Company    418 


SAMUEL  COLGATE,  New  York,  Colgate  &>  Co. 


422 


.     HENRY  BOWER,  Philadelphia, 

Henry  Bower  &*  Son,  Manufacturing  Chemists    429 

.     WILLIAM  P.  THOMPSON,  New  York, 

President  National  Lead  Company   433 

.    HENRY  G.  PIFFARD,  A.M.,  M.D.,  New  York, 

President  Genesee  Salt  Company    \\> 

.     FRANK  A.  KENNEDY,  Cambridge,  Mass., 

Kennedy's  Branch,  New  York  Biscuit  Company   446 

.    THOMAS  R.  CHANEY,  New  York, 

President  American  Cotton  Oil  Company    451 

.    THOMSON  KINGSFORD,  Oswego,  N.  Y., 

President  T.  Kingsford  cir1  Son    456 

.    OHIO  C.  BARBER,  Akron,  Ohio, 

President  The  Diamond  Match  Company    460 

.    ROBERT  MACLAY,  New  York, 

President  Knickerbocker  Ice  Company    466 

.    JAMES  W.  TUFTS,  Boston, 

President  American  Soda  Fountain  Company    470 

.     S.  N.  DEXTER  NORTH,  A.M., Boston, 

Secretary  National  Association  of  Wool  Manufacturers    475 

.     SHEPPARD  KNAPP,  New  York,  Shcppard  Knapp  &  Co.          .    485 
.     BENJAMIN  C.  CLARK,  Boston,  Pearson  Cordage  Company       .    489 


xvi  ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 

CHAPTKK  PACE 

75  HIDES  AND  LEATHER         ....     ROBERT  H.  FOERDERER,  Philadelphia  .    494 

76  AMERICAN  RUBBER  MANUFACTURES      .     CHARLES  L.  JOHNSON,  New  York, 

Secretary  United  States  Rubber  Company    498 

77  AMERICAN  WALL  PAPERS  .        .        .        .     HENRY  BURN,  New  York, 

President  National  Wall  Paper  Company    505 

78  AMERICAN  MUSICAL  INSTRUMENTS        .     WILLIAM  STEINWAY,  New  York,  President  Steinway  &  Sons .    509 

79  AMERICAN  CARRIAGE  AND  WAGON  WORKS,  CHAUNCEY  THOMAS,  Boston,  Chauncey  Thomas  &  Co.          .516 
So  AMERICAN  SAFE  WORKS     ....     WILLIS  B.  MARVIN,  New  York,  Marvin  Safe  Company        .    521 

81  AMERICAN  SEWING  MACHINES         .         .     FREDERICK  G.  BOURNE,  New  York, 

President  The  Singer  Manufacturing  Company    525 

82  AMERICAN  WATCHES  AND  CLOCKS         .     EDWARD  HOWARD,  Boston, 

Founder  The  E.  Howard  Watch  and  Clock  Company    540 

83  AMERICAN  TYPEWRITERS  .         .        .         .     CLARENCE  W.  SEAMANS,  New  York, 

Wyckoff,  Seamans  &>  Benedict    544 

84  THE  BICYCLE  INDUSTRY    ....    ALBERT  A.  POPE,  Boston, 

President  Pope  Manufacturing  Company    549 

85  THE  DRY  GOODS  TRADE      ....    JOHN  N.  BEACH,  New  York,  Tefft,  Weller  &  Co.         .         .    554 

86  THE  CLOTHING  AND  FURNISHING  TRADE,  WILLIAM  C.  BROWNING,  New  York,  Browning,  King  &  Co.  561 

87  THE  BOOT  AND  SHOE  TRADE    .         .         .     WILLIAM  B.  RICE,  Boston,  Rice  <&•  Hutchins       .         .         .566 

88  THE  HARNESS  AND  SADDLERY  TRADE  .     ALBERT  MORSBACH,  Cincinnati, 

President  National  Wholesale  Saddlery  Association    5  75 

89  THE  FUR  TRADE  .         .        .         .        .        .  F.  FREDERIC  GUNTHER,  New  York,  C.  G.  Gunther's  Sons  .    579 

90  THE  JEWELRY  TRADE         ....  CHARLES  L.  TIFFANY,  New  York,  President  Tiffany  &  Co.      589 

91  THE  GROCERY  TRADE         ....  JAMES  E.  NICHOLS,  New  York,  Austin,  Nichols  <&•*  Co.  .    595 

92  THE  FRUIT  TRADE JOHN  W.  Nix,  New  York,  John  Nix  &•  Co.         .         .         .602 

93  THE  DRUG  TRADE JOHN  MCKESSON,  New  York,  McKesson  &  Robbint     .         .    607 

94  THE  PAINT,  OIL,  AND  VARNISH  TRADE  .  DANIEL  F.  TIEMANN,  New  York,  D.  F.  Tiemann  &•  Co.     .    620 

95  THE  CONFECTIONERY  TRADE  .         .         .    ALBERT  F.  HAYWARD,  Boston, 

President  and  Treasurer  Fobes,  Hayward  &=  Co.  625 

96  THE  FURNITURE  TRADE    ....     GEORGE  W.  GAY,  Grand  Rapids,  Mich., 

Treasurer  Berkey  6°  Gay  Furniture  Company    628 

97  THE  HARDWARE  TRADE    ....     EDWARD  C.  SIMMONS,  St.  Louis, 

President  Simmons  Hardware  Company    633 

98  THE  STATIONERY  TRADE  ....     JOHN  G.  BAINBRIDGE,  New  York,  Henry  Bainbridge  &*  Co.       642 

99  OTHER  INDUSTRIES ALBERT  CLARK  STEVENS,  New  York,  Editor  Bradstreefs      .    6.48 

100  THE  NEXT  ONE  HUNDRED  YEARS  .         .     CHAUNCEY  M.  DEPEW,  LL.D.,  New  York  .         .  .675 


ILLUSTRATIONS 


CHIEF-JUSTICE  JOHN  JAY.     FRONTISPIECE 


PAGE 

LEVI   P.  MORTON     ....  4 

CARROLL  D.  WRIGHT  ...  12 

WORTHINGTON  C.  FORD  .     .  20 

EDWARD  A.  MOSELEY     .     .  28 

THOMAS  L.  JAMES    ....  36 

EUGENE  T.  CHAMBERLAIN  40 

CHARLES  F.  CLARK     ...  44 

WILLIAM  JAY 48 

ALEXANDER  E.  ORR    ...  52 

HORACE  PORTER     ....  56 

CHARLES  R.  FLINT  ....  64 

JOHN   P.  TOWNSEND    ...  68 

FRANCIS  W.  AVER    ....  80 

HENRY  H.  HALL      ....  84 

SHEPPARD  HOMANS  ...  92 
STUYVESANT  FISH  .  .  .  .104 

JAMES  MCMILLAN  .   .   .   .  n6 

CHARLES  H.  CRAMP  ...  120 
THOMAS  T.  ECKERT  ...  128 
JOHN  E.  HUDSON  ....  134 

LEVI   C.  WEIR 138 

HERBERT  H.  VREELAND  .  144 
HIRAM  HITCHCOCK  .  .  .152 
ALBERT  M.  PALMER  .  .  .  160 
CHARLES  H.  TAYLOR .  .  .  168 
DAVID  WILLIAMS  .  .  .  .176 
RICHARD  P.  ROTHWELL  .  180 
REDFIELD  PROCTOR  .  .  .  188 
FRANCIS  G.  DuPONT  ...  192 
BERNHARD  E.  FERNOW  .  .  200 
HENRY  C.  FOLGER,  JR.  .  .208 
GEORGE  E.  MORROW .  .  .216 
LAZARUS  N.  BONHAM  .  .  224 


RICHARD  H.  EDMONDS  . 
WILLIAM  LAWRENCE  . 
ALFRED  HENDERSON  . 
JOHN  E.  SEARLES  .  .  . 
JOHN  F.  TALMAGE  .  .  . 
CHARLES  A.  PILLSBURY 
JAMES  GILLINDER  .  .  . 

JOHN   MOSES 

EMERSON  McMILLIN  .  . 
WARNER  MILLER  .  .  . 
JOHN  W.  HARPER  .  .  . 
THEODORE  L.  DE  VINNE 
CHARLES  HUSTON  .  .  . 
ALFRED  A.  COWLES  .  . 
ALBA  B.  JOHNSON  .  .  . 
WILLIAM  SELLERS .  .  . 
ELDRIDGE  M.  FOWLER  . 
JEREMIAH  DWYER.  .  . 
JORDAN  L.  MOTT  .  .  . 
WILLIAM  H.  JACKSON  . 
T.  COMMERFORD  MARTIN 
PHILIP  D.  ARMOUR  .  . 
EUGENE  G.  BLACKFORD 
EDWARD  S.  JUDGE.  .  . 
CHARLES  CARPY.  .  .  . 
JAMES  E.  PEPPER  .  .  . 

FRED.  PABST 

PIERRE  LORILLARD,  JR. 
SAMUEL  COLGATE  .  .  . 
HENRY  BOWER  .... 
WILLIAM  P.  THOMPSON  . 
HENRY  G.  PIFFARD  .  . 
FRANK  A.  KENNEDY  .  . 


FACING 

PAGE 

.  232 

.  240 

.  252 

.  26O 

.  264 

.  268 

.  276 

.  288 

.  296 

•  3°4 
.  308 


324 
332 
34° 
348 
352 
36o 
368 
372 
380 
384 
392 
396 
404 
408 
416 
420 
424 
43° 
436 
444 
448 


PACING 
PACK 

THOMSON   KINGSFORD    .    .  456 

O.  C.  BARBER 464 

ROBERT  MACLAY  ....  468 
JAMES  W.  TUFTS  ....  472 

S.  N.  D.  NORTH 480 

SHEPPARD  KNAPP  ....  486 
BENJAMIN  C.  CLARK  ...  492 
ROBERT  H.  FOERDERER  .  496 
CHARLES  L.  JOHNSON  .  .  500 

HENRY   BURN 506 

WILLIAM  STEINWAY  .  .  .512 
CHAUNCEY  THOMAS  .  .  .516 
WILLIS  B.  MARVIN.  .  .  .522 
FREDERICK  G.  BOURNE  .  528 
EDWARD  HOWARD  ...  540 
CLARENCE  W.  SEAMANS  .  544 

ALBERT  A.  POPE 552 

JOHN  N.  BEACH 556 

WILLIAM  C.  BROWNING.  .  564 
WILLIAM  B.  RICE  ....  568 
ALBERT  MORSBACH  .  .  .576 
F.  FREDERIC  GUNTHER  .  580 
CHARLES  L.  TIFFANY  .  .  592 
JAMES  E.  NICHOLS  ...  596 

JOHN  W.  NIX 604 

JOHN  McKESSON  ....  608 
DANIEL  F.  TIEMANN  .  .  .620 
ALBERT  F.  HAYWARD  .  .  626 
GEORGE  W.  GAY  ....  628 
EDWARD  C.  SIMMONS  .  .  636 
JOHN  G.  BAINBRIDGE  .  .  644 
ALBERT  CLARK  STEVENS  .  652 
CHAUNCEY  M.  DEPEW  .  .  676 


jml 


THE   CHRONOLOGY   OF 
AMERICAN   COMMERCE   AND   INVENTION 

WITH    OTHER   IMPORTANT    HISTORICAL    EVENTS 


1795. 

Second  Year,  President  Washington's  Second  Term. 

President,  GEORGE  WASHINGTON,  Virginia. 
Vice-President,  JOHN  ADAMS,  Massachusetts. 
Secretary  of  State,  EDMUND  RANDOLPH,  Virginia. 
Secretary  of  the  Treasury,  ALEXANDER  HAMILTON,  New  York. 
Secretary  of  War,  HENRY  KNOX,  Massachusetts. 
Postmaster-General,  TIMOTHY  PICKERING,  Massachusetts. 
Attorney-General,  WILLIAM  BRADFORD,  Pennsylvania. 
Speaker  of  the  House  of  Representatives,  F.  A.  MUHLENBURG, 
Pennsylvania. 

Secretary  Hamilton  announced  his  redemption  policy,  Jan.  15. 

Jacob  Perkins,  of  Newbnryport,  Mass.,  patented  a  machine 
for  cutting  and  heading  nails,  Jan.  16. 

Secretary  Hamilton  resigned,  and  Oliver  Wolcott,  of  Con- 
necticut, succeeded  him,  Jan.  31. 

Federal  money  first  reckoned  by  decimal  system  of  dollars, 
cents,  and  mills,  Feb.  5. 

Joseph  Habersham,  of  Georgia,  appointed  Postmaster-Gen- 
eral, in  place  of  Timothy  Pickering,  resigned,  Feb.  25. 

National  flag  established  with  fifteen  alternate  red  and  white 
stripes,  and  a  blue  union  with  fifteen  white  stars,  May  I. 

Jay  Treaty  ratified  by  the  Senate,  June  24;  ratifications 
exchanged  between  the  two  countries,  Oct.  28 ;  formally  an- 
nounced by  President  Washington  to  the  House,  December. 

The  United  States  agreed  to  pay  annual  tribute  to  the  Dey 
of  Algiers  to  secure  exemption  from  pirates,  Sept.  5. 

Spain  conceded  the  free  navigation  of  the  Mississippi  River, 
and  the  Florida  boundaries  were  established,  Oct.  27. 

Charles  Lee,  of  Virginia,  appointed  Attorney-General,  in 
place  of  William  Bradford. 

Timothy  Pickering  appointed  Secretary  of  State  vice  Ed- 
mund Randolph,  resigned,  Dec.  II. 

First  issue  of  the  New  York  Prices-Current,  now  the  Ship- 
ping and  Commercial  List  and  New  York  Price-Current, 
Dec.  19. 

Etienne  Bore1  developed  an  improved  method  for  the  extrac- 
tion of  sugar  from  the  cane. 

1796. 

Tennessee  admitted  to  the  Union,  June  I. 

John  Fitch  ran  the  first  screw  boat  using  steam  power  on 
the  Collect,  New  York,  August. 

French  Directory  refused  to  recognize  the  United  States 
Minister,  Charles  C.  Pinckney,  of  South  Carolina,  Sept.  II. 

Washington  issued  his  farewell  address.  Sept.  17- 

Binny  &  Ronaldson  established  in  Philadelphia  the  first 
permanent  type-foundry. 


New  York  Insurance  Company,  the  second  in  the  country 
to  take  marine  risks,  incorporated. 

Major  Isaac  Craig  and  Colonel  James  O'Hara  established 
the  first  glass-works  in  Pittsburg. 

1797. 

John  Adams  inaugurated,  March  4. 

Thomas  Newbold  of  New  Jersey  patented  first  cast-iron 
plow,  June. 

Yellow  fever  epidemic  at  Philadelphia  and  New  York,  Aug. 
French  Directory  issued  decree  against  American  commerce. 
Philadelphia  Quakers  petitioned  Congress  against  slavery. 

1798. 

Navy  Department  created.  George  Cabot  first  secretary, 
May. 

Congress  suspended  commercial  relations  with  France,  June. 

Alien  and  Sedition  laws  passed,  July. 

First  salt  manufactory  established  in  Ohio. 

Joseph  Hopkinson  wrote  "Hail  Columbia." 

Imprisonment  for  debt  to  the  United  States  abolished. 

First  machine  for  making  combs  patented  by  Isaac  Tryon. 

First  American  vessel  launched  on  Lake  Erie. 

First  merino  sheep  brought  from  Spain  by  Hon.  William 
Porter. 

1799. 

Napoleon  overthrew  the  French  Directory,  and  commercial 
relations  with  this  country  were  restored,  August. 

George  Washington  died  at  Mount  Vemon,  aged  67,  Dec.  14. 

The  government  paid  8  per  cent,  for  a  $5,000,000  loan. 

Yellow  fever  epidemic  in  New  York. 

The  Manhattan  Company  chartered  in  New  York. 

First  shipment  of  ice  from  New  York  to  Charleston,  S.  C. 

Eliakim  Spooner  took  out  first  patent  for  a  seeding  machine. 

1800. 

Epidemic  of  yellow  fever  at  Baltimore,  August. 

War  office  and  Treasury  building  at  Washington  burned, 
September. 

Congress  first  assembled  at  Washington,  Nov.  22. 

General  bankruptcy  law  passed,  December. 

The  Second  Census  gave  the  population  of  the  country  as 
5,308,483. 

United  States  first  imported  India  rubber  at  Boston. 

1801. 

John  Marshall  chief  justice  of  the  United  States,  Jan.  20. 
Thomas  Jefferson  inaugurated,  March  4. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


Tripoli  declared  war  against  the  United  States,  June  10. 
The  federal  judiciary  reorganized. 
Quarantine  established  on  Staten  Island. 
First  sheet-copper  turned  out  from  Paul  Revere's  mill  at 
Canton,  Mass. 
Congressional  Library  established. 

1802. 

West  Point  Military  Academy  established,  March  16. 

Ohio  admitted  to  the  Union,  Nov.  29. 

Process  for  making  potato  starch  patented  by  John  Biddis, 
of  Philadelphia. 

First  important  powder-works  established  by  Eleuthere  I. 
du  Pont. 

Philadelphia  Chamber  of  Commerce  established. 

Abel  Porter  &  Company  commenced  the  manufacture  of 
gilt  buttons  in  Connecticut. 

1803. 

Louisiana  purchased  from  France  for  $15,000,000,  Apr.  30. 

Richard  French  and  J.  T.  Hawkins  patented  the  first  con- 
trivance for  reaping  machines,  May  17. 

First  cotton  mill  established  in  New  Hampshire. 

Crawford  built  the  first  tavern  in  the  White  Mountains  for 
summer  tourists. 

First  bank  established  in  Cincinnati. 

1804. 

Lewis  and  Clark  started  to  explore  the  Northwest,  March. 

Machine-embroidering  introduced  by  John  Duncan,  May. 

New  Jersey's  slaves  freed,  July  4. 

The  Burr-Hamilton  duel  at  Weehawken,  N.  J.,  July  u. 

Chicago  first  settled  as  a  trading  post  by  John  Kinzie. 

National  Bankruptcy  Act  repealed. 

Middlesex  Canal  completed  between  Boston  and  the  Con- 
cord River. 

The  manufacture  of  white  lead  begun  by  Samuel  Wetherill 
in  Philadelphia. 

Captain  John  N.  Chester  imported  the  first  bananas. 

Almy  &  Brown  of  Providence,  R.  I.,  made  first  consign- 
ment for  sale  of  American  cottons  to  Elijah  Warren  of  Phila- 
delphia. 

1805. 

Peace  with  Tripoli,  June  3. 

Robert  Fulton  originated  the  marine  torpedo. 

First  cargo  of  ice  for  export  shipped  to  Martinique  by 
Frederick  Tudor. 

First  drove  of  cattle  on  the  hoof  for  the  Eastern  market 
crossed  the  Alleghanies. 

Printers'  ink  first  manufactured  here. 

1806. 

England  proclaimed  the  blockade  of  the  European  ports, 
June  16. 

France  by  Berlin  decree  proclaimed  the  blockade  of  Eng- 
lish ports,  Nov.  21, 

The  first  cargo  of  anthracite  coal  shipped  to  Philadelphia 
from  the  Pennsylvania  mines. 

First  confectionery  factory  established  in  New  York  by 
Ridley. 

David  Melville,  of  Newport,  R.  I.,  made  earliest  use  of  gas 
to  light  his  house. 

First  American  saws  manufactured  by  William  Rowland, 
of  Philadelphia. 


1807. 

Aaron  Burr's  trial  for  treason  began,  May  22. 

Fulton's  first  steamboat,  the  Clermont,  made  the  trip  from 
New  York  to  Albany,  Aug.  1 1. 

Aaron  Burr  acquitted,  Sept.  I. 

The  Embargo  passed  by  Congress,  Dec.  22. 

Patent  shot-tower  of  Paul  Beck  built  on  the  Schuylkill. 

Eli  Terry,  of  Plymouth,  Conn.,  began  the  manufacture  of 
clocks  by  machinery. 

Machine  for  the  simultaneous  cutting  and  heading  of  tacks 
patented  by  Jesse  Reed,  of  Bridgewater. 

Shipment  of  ice  from  Boston  to  Havana  commenced. 

Anthony  Tiemann  introduced  the  manufacture  of  colors. 

First  wheat-starch  factory  started  at  Utica  by  Edward  and 
John  Gilbert. 

1808. 

Importation  of  slaves  forbidden,  Jan.  I. 

The  P/ucnix,  built  by  John  Stevens,  of  Hoboken,  made  first 
sea  trip  by  steamboat,  between  New  York  and  Philadelphia. 

American  Fur  Company  founded  by  John  Jacob  Astor. 

First  patent  for  stoves  to  warm  by  rarefied  air  granted  to 
Daniel  Pettibone,  of  Philadelphia. 

Bakewell  and  Page  inaugurated  the  manufacture  of  flint- 
glass  at  Pittsburg. 

First  queensware  made  by  Columbia  Pottery  Company  at 
Philadelphia. 

1809. 

James  Madison  inaugurated,  March  4. 

Embargo  removed  except  to  French  and  English  ports, 
March  15. 

Cotton  duck  for  sail-cloth  first  made  in  the  United  States. 

Abel  Stowell,  of  Worcester,  Mass.,  patented  a  machine  for 
cutting  screws. 

Discovery  of  Manhattan  Island  celebrated  by  a  banquet  at 
the  old  City  Hotel,  New  York. 

1810. 

The  Third  Census  gave  the  population  of  the  country  as 
7,239,881. 

Peregrine  Williamson,  of  Baltimore,  made  the  first  metallic 
pens. 

Astoria,  Oregon,  founded  by  the  Pacific  Fur  Company 
and  John  Jacob  Astor. 

Kaolin  discovered  at  Monkton,  Vermont. 

Plan  for  cantaliver  bridge  across  East  River  proposed  by 
Thomas  Pope. 

George  Frederick  Cooke,  the  English  actor,  inaugurated 
the  star  system  in  American  theatres. 

Simmons  and  Rundel,  of  Charleston,  S.  C.,  patented  a  pro- 
cess for  saturating  water  with  "  fixed  air,"  producing  a  sort  of 
soda  water. 

1811. 

The  first  steamboat  left  Pittsburgh  for  New  Orleans  via  the 
Ohio  and  Mississippi  rivers,  Oct.  27. 

Gen.  Harrison  defeated  Tecumseh  at  Tippecanoe,  Ind., 
Nov.  7. 

Congress  refused  to  recharter  the  Bank  of  the  United  States. 

First  steam  ferry-boat  ran  between  Hoboken  and  New  York. 

Wooden  shoe  pegs  invented. 

Exports  of  flour  exceeded  1,000,000  barrels  for  the  first 
time. 

1812. 

A  ninety  days'  embargo  proclaimed,  Apr.  4. 
Louisiana  admitted  to  the  Union,  Apr.  30. 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


War  declared  against  England,  June  18. 
Engagement  between  the  Constitution  and  the  Guerriere, 
Aug.  19. 

The  first  pin  factory  was  established  in  New  York. 
Pittsburgh  started  the  first  rolling-mill. 

1813. 

Engagement  between  the  Chesapeake  and  Shannon,  June  I. 

Commodore  Perry's  great  Lake  Erie  victory,  Sept.  13. 

Two  New  York  men  began  the  manufacture  of  hair-cloth  at 

,ahway,  N.  J. 

First  Brooklyn  ferry  ran. 

Stereotyping  and  printing  from  stereotype  plates  was 
introduced. 

First  complete  mill  in  the  world  for  turning  out  raw  cotton 
as  finished  cloth,  established  at  Waltham,  Mass. 

Illuminating  gas  apparatus  patented  by  David  Melville. 

Francis  C.  Lowell  brought  out  the  power-loom. 

1814. 

Washington  captured  by  the  British,  and  public  buildings 
and  records  burned,  Aug.  25. 

Specie  payment  suspended,  Sept.  I. 

Delegates  from  New  England  States  convened  at  Hartford, 
Conn.,  to  devise  defense  against  the  British  independently  of 
the  National  Government,  Dec.  15. 

Treaty  of  peace  with  England  signed  at  Ghent,  Dec.  24. 

Steel  plate  engraving  invented  by  Jacob  Perkins,  of  New- 

buryport,  Mass. 

1815. 

Gen.  Jackson  defeated  the  British  at  New  Orleans,  Jan.  8. 
War  against  the  United  States  declared  by  the  Dey  of  Algiers, 
March. 

Commercial  convention  with  England  signed,  July  3. 
Secretary  of  the  Treasury  Dallas  proposed  a  protective  tariff. 
Steam-power  first  applied  to  machinery  for  cabinet-making. 
The  first  steamboat  ascended  the  Mississippi  to  Louisville. 

1816. 

First  savings-bank  opened  in  America,  at  Philadelphia,  No- 
vember. 

Indiana  admitted  to  the  Union,  Dec.  1 1. 

Lighting  the  streets  with  gas  introduced  at  Baltimore. 

First  Seminole  war. 

Concessions  granted  by  the  Spanish  government  allowing 
shipment  of  ice  to  Cuba. 

Black-Ball  packets,  the  first  line,  established  between  New 
York  and  Liverpool. 

1817. 

United  States  National  Bank  opened  again  at  Philadelphia, 
January. 

James  Monroe  inaugurated,  March  4. 

Ground  broken  in  construction  of  Erie  Canal,  July  4. 

Mississippi  admitted  to  the  Union,  Dec.  10. 

Steam-power  first  applied  to  paper-making  at  Pittsburgh. 

Work  begun  by  the  United  States  Coast  Survey. 

First  Deaf  and  Dumb  Asylum  established  at  Hartford,  Conn. 

Harper's  publishing  house  founded. 

Gas  employed  in  lighthouse  illumination  by  David  Melville. 

Thomas  Gilpin  &  Co.  operated  the  first  cylinder  machine 
for  making  paper  at  Wilmington,  Del. 

Steam  navigation  began  on  Lake  Erie. 

1818. 

Congress  established  the  flag  with  thirteen  stripes,  and  a 
star  for  each  State,  Apr.  14. 
Illinois  admitted  to  the  union,  Dec.  3. 


Western  State  banks  suspended. 

Reed  principle  for  musical  instruments  patented  by  Aaron 
Merrill  Peasley. 

First  line  of  steam  packets  on  Long  Island  Sound  between 
New  York  and  New  Haven. 

Elisha  Mills  began  the  packing  industry  at  Cincinnati. 

First  stage-coach  over  the  Cumberland  road  to  Wheeling. 

The  internal  revenue  tax  on  whisky  abolished. 

Du  Pont  powder-works  destroyed  by  terrific  explosion. 

First  drove  of  western  cattle  brought  to  New  York. 

1819. 

Florida  purchased  from  Spain  for  $5,000,000,  Feb.  22. 

The  first  paper  devoted  to  agricultural  interests  published 
at  Baltimore,  Apr.  2. 

The  Odd  Fellows  organized  at  Baltimore,  Apr.  26. 

Steamship  Savannah  started  on  first  trans-Atlantic  trip  of 
steam-vessel,  May  21,  and  arrived  at  Liverpool,  June  20. 

Alabama  admitted  to  the  Union,  Dec.  14. 

Seth  Boyden  began  the  manufacture  of  patent  leather  at 
Newark. 

The  manufacture  of  porcelain  from  domestic  materials  was 
begun  in  New  York  by  Dr.  H.  Mead. 

Great  financial  depression  existed. 

First  savings-bank  opened  in  New  York. 

John  Conant  of  Vermont  invented  his  cooking-stove. 

Plow  with  interchangeable  parts  patented  by  Jethro  Wood. 

Ezra  Daggett  and  Thomas  Kensett  put  up  the  first  canned 
goods  in  New  York. 

1820. 

Thomas  Blanchard  patented  the  gun-stock  lathe,  Jan.  20. 

Maine  admitted  to  the  Union,  March  15. 

The  Fourth  Census  gave  the  population  of  the  country  as 
9,633,822. 

Anthracite  coal  first  used  successfully  for  the  generation  of 
steam  at  Philadelphia. 

The  first  steamboat  ran  on  Lake  Michigan. 

First  rubber  shoes  imported  from  South  America. 

Daily  meeting  with  regular  call  of  stocks  begun  on 
"Change." 

The  United  States  Pharmacopoeia  established. 

1821. 

Missouri  Compromise  adopted,  Feb.  26. 

General  Jackson  took  possession  of  Florida  on  behalf  of 
the  United  States,  July  I. 

Missouri  admitted  to  the  Union,  Aug.  10. 

New  York  quarantine  station  and  hospitals  established 
at  Castleton,  S.  I.,  September. 

Sophia  Woodhouse,  of  Wethersfield,  Conn.,  patented  the 
straw  hat,  Dec.  25. 

American  Colonization  Society  secured  Liberia,  December. 

Bronze  printing  patented  by  George  J.  Newbury. 

Remains  of  Major  Andr£  removed  from  Tappan,  N.  Y., 
to  Westminster  Abbey,  London. 

The  rotary  steam-engine  patented  by  Mr.  Ward,  of  Colum- 
bia, S.  C. 

The  first  college  of  pharmacy  established  at  Philadelphia. 

1822. 

Treaty  of  commerce  and  navigation  concluded  with  France, 
June  24. 

The  Merrimac  Manufacturing  Company  started  the  city  of 
Lowell,  Mass.,  Sept.  3. 

Mason  and  Baldwin  of  Philadelphia  began  engraving  cy- 
linders for  calico  printing. 

First  patent  of  artificial  teeth  secured  by  C.  M.  Graham. 


xxii 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


Iron  conduit  pipes  were  first  used  in  the  Fairmount  Water 
Works  at  Philadelphia. 

Thomas  Skidmore  of  New  York  introduced  India  rubber 
tubes  for  gaseous  fluids. 

Naval  expedition  sent  against  the  West  Indian  pirates  by 
United  States. 

Lock  coulter  for  plows  patented  by  David  Peacock  of  New 
Jersey. 

Depau's  line  of  Havre  packets  established. 

The  first  wheel  mill  for  incorporating  powder  erected  on 
Brandywine  Creek,  Del. 

Luke  Davies  opened  the  first  store  distinctively  for  men's 
furnishing  goods. 

1823. 

Monroe  Doctrine  promulgated,  Dec.  2.  European  powers 
not  to  be  permitted  to  interfere  with  the  independent  States 
of  America,  or  to  acquire  dominion  on  this  continent. 

First  steam-power  printing-press  set  up  in  Albany  by  a 
printer  named  Van  Benthuysen. 

Champlain  Canal,  connecting  the  Hudson  at  Albany  with 
Lake  Champlain,  opened. 

Manufacture  and  tin-plating  of  lead  pipe  for  stills  was 
begun  in  New  York  by  Thomas  Ewbank. 

The  first  smelting-works  in  the  lead  region  of  the  upper 
Mississippi  erected  by  Col.  James  Johnson  of  Kentucky. 

Nicholas  Longworth  of  Cincinnati  commenced  the  making 
of  wine  with  the  muscatel  grape. 

First  corporation  for  the  manufacture  of  gas  started  as  the 
New  York  Gas-Light  Company  with  a  capital  of  $1,000,000. 

1824. 

Lafayette  arrived  at  Staten  Island  on  his  visit  to  the  United 
States,  Aug.  15. 

The  geological  survey  of  North  Carolina  was  begun  by 
Denison  Olmsted. 

Zadoc  Pratt  established  a  great  hemlock  tanning  factory 
in  Greene  Co.,  New  York. 

Cape  Cod  began  to  manufacture  isinglass  from  hake. 

The  first  juvenile  reformatory  established  in  New  York. 

Glazed-ground  wall-papers  were  first  made. 

1825. 

John  Quincy  Adams  inaugurated,  March  4. 

Corner-stone  of  Bunker  Hill  Monument  laid  by  Lafayette, 
June  17. 

Isaiah  Lukins  of  Philadelphia  patented  the  lithotritor  in 
England,  Sept.  15. 

First  boats  left  Buffalo  by  the  Erie  Canal,  Oct.  26. 

De  Witt  Clinton  and  the  first  boats  arrived  in  New  York 
via  the  Erie  Canal,  and  a  grand  celebration  took  place  in 
this  city,  Nov.  4. 

First  performance  of  Italian  opera  at  New  York,  Nov.  29. 

Isaac  Babbitt,  of  Taunton,  Mass.,  invented  Babbitt  metal 
and  commenced  the  manufacture  of  Britannia  ware. 

William  Ellis  Tucker  commenced  the  manufacture  of  porce- 
lain at  Philadelphia. 

The  so-called  labor  movement  first  came  into  prominence. 

The  circular  saw  brought  out  by  Mr.  Richardson  of  Phila- 
delphia. 

Taylor  &  Rich  erected  the  first  mahogany  mill. 

1826. 

Eli  Whitney,  inventor  of  the  cotton  gin,  died,  Jan.  8. 
New  England  Society  for  the  Promotion  of  Manufactures 
and  the  Mechanic  Arts  chartered,  March  3. 

Death  of  John  Adams  and  Thomas  Jefferson,  July  4. 


First  railroad  with  metal  rails  from  Quincy,  Mass.,  to  tide 
water,  three  miles  away,  Oct.  7. 

James  Oram,  founder  of  the  Shipping  List  and  New  York 
Price  Current,  died  Oct.  27;  born  May  10,  1760. 

National  Academy  of  Design  founded  in  New  York. 

Power-loom  for  weaving  wire  invented  by  John  S.  Gastrin, 
of  New  York. 

Manufacture  of  palm-leaf  hats  begun  in  Massachusetts. 

Ice  first  cut  on  Rockland  Lake  and  retailed  in  New  York. 

Failures  of  the  great  tea  importers  caused  a  heavy  loss  to 
the  Government  in  customs  duties. 

Composition  rollers  for  printing  presses  first  used. 

W.  Kendall  patented  the  insertable  tooth  for  rotary  saws. 

1827. 

Switchback  Railroad  operating  by  gravity  opened  at  Mauch 
Chunk,  Pennsylvania,  Jan.  8. 

First  general  convention  of  the  manufacturing  interests 
of  the  country  held  at  Harrisburg,  Pa.,  July  30. 

English  artists  introduced  lithography  at  Boston. 

James  MoClintin  of  Chambersburg,  Pa.,  invented  the  first 
practical  contrivance  for  mortising  and  tenoning. 

The  manufacture  of  wood  type  was  begun  at  New  York 
by  Darius  Wells. 

The  first  bell  made  from  blistered  bar  steel  in  New  York. 

Rope  factories  first  applied  steam  as  power  at  Wheeling. 

Sandwich  Glass  Company  made  first  pressed  glass. 

First  drove  of  hogs  entered  Chicago. 

Stone  for  Bunker  Hill  monument  quarried  at  Quincy. 

Harrison  Gray  Dyar  constructed  an  electric  telegraph  on 
Long  Island. 

Jacob  Perkins  built  a  compound  stationary  engine,  using 
steam  of  1400  pounds  pressure. 

1828. 

The  American  Institute  organized,  Feb.  19. 

Heavy  duties  laid  on  imported  fabrics  of  cotton  or  wool, 
May  15. 

The  first  wool  sale  was  held  at  Boston  and  brought  $300,- 
ooo,  June  10. 

First  edition  of  Webster's  American  Dictionary  published, 
June. 

First  American  power-loom  for  weaving  checks  and  plaids 
patented  by  Rev.  E.  Burt,  of  Conn.,  August  19. 

Franklin  Institute  medal  awarded  Seth  Boyden  for  first 
buckles  and  bits  made  of  annealed  cast  iron,  Oct.  16. 

First  patent  for  locomotive  issued  to  William  Howard  of 
Baltimore. 

Manufacture  of  varnish  begun  in  New  York  by  P.  B.  Smith. 

William  Woodworth  of  Hudson,  N.  Y.,  invented  the  first 
machine  for  planing,  cutting,  tonguing,  and  grooving  boards. 

Sea  Island  cotton  first  appeared  in  the  market. 

The  first  trip-hammer  shop  for  the  manufacture  of  axes 
built  by  Samuel  Collins,  at  Collinsville,  Conn. 

Manufacture  of  horse  collars  begun  by  Timothy  Deming 
at  East  Hartford,  Conn. 

Carbondale  Railroad,  the  first  on  which  a  locomotive  was 
used,  built. 

1828. 

Andrew  Jackson  inaugurated,  March  4. 

Safety  Fund  Banking  Act  passed  in  New  York  State,  April. 

First  annual  fair  at  Castle  Garden  of  the  American  Insti- 
tute of  the  State  of  New  York,  Nov.  I. 

Hamilton  Stewart  began  in  Philadelphia  the  manufacture  of 
damask  table  linen,  December. 

Tin  ore  discovered  at  Goshen,  Conn.,  by  Prof.  Hitchcock. 


ONE    HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


The  manufacture  of  sewing  silk  by  machinery  begun  by 
James  Conant  at  Mansfield,  Mass. 

Dr.  John  M.  Revere  of  New  York  perfected  the  process 
of  galvanizing  iron. 

First  paper  from  grass  and  straw  fiber  made  by  machinery 
by  G.  A.  Shryock,  of  Philadelphia. 

The  Stourbridgt  Lion,  the  first  locomotive  ever  run  in  this 
country,  arrived  from  England. 

First  American  locomotive  constructed  by  Peter  Cooper  for 
the  Baltimore  and  Ohio  R.R. 

1830. 

Joseph  Smith  organized  the  first  Mormon  Church  at  Man- 
chester, N.  Y.,  Apr.  6. 

The  Welland  Canal  between  Lakes  Erie  and  Ontario  com- 
pleted, Aug.  3. 

The  City  of  Chicago  was  laid  out,  Aug.  4. 

The  Fifth  Census  gave  the  population  of  the  country  as 
12,866,020. 

The  first  astronomical  telescope  was  erected  at  Yale. 

Joseph  Dixon  began  the  manufacture  of  lead-pencils  at 
Salem,  Mass. 

First  native  Georgia  gold  came  to  the  United  States. 

The  omnibus  first  appeared  in  the  streets  of  New  York. 

Windham,  Conn.,  turned  out  the  first  Fourdrinier  ma- 
chines. 

The  Baltimore  and  Ohio  Railroad  opened  its  first  section 
operated  by  horse  power. 

Holmes,  Hotchkiss,  Brown  &  Elton  commenced  the  manu- 
facture of  sheet  brass  at  Waterbury,  Conn. 

First  locomotive  constructed  in  the  United  States  for  actual 
service,  the  Best  Friend,  built  at  West  Point  Foundry  Works 
for  the  South  Carolina  Railroad. 

1831. 

The  first  train  drawn  by  a  locomotive  ran  on  the  South 
Carolina  Railroad,  Jan.  15. 

The  Mohawk  and  Hudson  Railroad  opened  in  September. 

Discovery  of  chloroform  announced  by  Samuel  Guthrie,  of 
Sackett's  Harbor,  N.  Y.,  Oct.  12. 

The  first  four-wheel  car  trucks  used  on  the  South  Caro- 
lina Railroad. 

Timothy  Bailey  of  Albany  invented  the  power-loom  for 
stocking  knitting. 

The  Morris  Canal  opened,  connecting  Newark  with  the 
Delaware  river. 

The  West  Feliciana  Railroad,  the  first  west  of  the  Alle- 
ghanies,  incorporated  in  Louisiana. 

The  Baldwin  Locomotive-Works  established  in  Philadelphia. 

Pennsylvania  inaugurated  a  system  of  internal  improve- 
ments, consisting  of  292  miles  of  canal  and  126  of  railroad. 

1832. 

Asiatic  cholera  made  its  first  appearance  in  New  York, 
June  21. 

Commercial  and  financial  distress,  July  to  October. 

The  first  street-railway  in  the  country  opened  in  New  York 
between  City  Hall  and  Fourteenth  street,  November. 

Davis  &  Gartner,  of  York,  Pa.,  built  three  locomotives  of 
the  grasshopper  pattern  for  the  Baltimore  and  Ohio  Railroad. 

The  Nullification  Ordinance  passed  by  South  Carolina. 

First  hogs  packed  in  Chicago  by  George  Dole. 

Egbert  Egberts,  of  Cohoes,  brought  out  the  power  knitting- 
machine. 

First  cargo  of  Sicily  oranges  and  lemons  imported. 

Manufacture  of  table  cutlery  begun  in  this  country. 

Use  of  tan-bark  in  manufacture  of  white  lead  introduced. 


First  soda  water  apparatus  manufactured  by  John  Matthew* 
of  New  York. 

Trowbridge,  Dwight  &  Company  established  the  wholesale 
clothing  manufacture  at  New  Haven. 

First  shirt  factory  established  by  David  &  Isaac  Judion  in 
New  York. 

Swiveling  fore-end  truck  for  locomotives  introduced  to  gen- 
eral use. 

1833. 

The  first  cargo  of  American  ice  was  exported  to  India  by 
Frederick  Tudor,  May. 

The  "  New  York  Sun  "  founded,  Sept.  3. 

Government  funds  withdrawn  from  the  Bank  of  the  United 
States,  October. 

The  first  company  to  import  and  breed  cattle  organized, 
Nov.  2. 

Commercial  treaties  were  entered  into  with  Austria,  Tur- 
key, and  the  Two  Kingdoms  of  Sicily. 

Treasury  Building  at  Washington  was  burned. 

Obed  Hussey  patented  and  exhibited  in  Ohio  the  first  practi- 
cal reaping-machine. 

Ross  Winans  built  the  first  typical  American  passenger  cars. 

The  Roxbury  India-Rubber  Company,  the  first  in  the  busi- 
ness, organized. 

Samuel  Preston  invented  the  pegging-machine. 

The  crosshead  pump  for  supplying  feed-water  to  the  boiler 
in  locomotives  introduced. 

1834. 

New  York  National  Guard  called  out  for  the  first  time  in 
suppressing  the  anti-abolition  riots,  April. 

Cornelius  M.  Lawrence  first  mayor  chosen  by  vote  of  the 
people  in  New  York,  May. 

Cyrus  Hall  McCormick  patented  his  reaper,  June  21. 

The  first  vessel  arrived  at  Chicago  from  the  lower  lakes, 
July  12. 

Lathe  for  turning  lasts  patented,  Dec.  25. 

First  attempt  at  crushing  the  oil  from  cotton-seed  made 
at  Natchez. 

Screws  were  first  made  entirely  by  machinery. 

Rope-yarn  spinner  invented  in  New  York. 

The  first  saw-mill  in  the  Saginaw  valley  built  by  Harvey 
Williams. 

Half-crank  locomotive  driving  axles  introduced. 

The  manufacture  of  door  locks  begun  in  Connecticut. 

1835. 

New  York  voted  to  begin  the  Croton  Aqueduct,  March. 

Solyman  Merrick,  of  Springfield,  Mass.,  patented  the  first 
practical  screw  wrench,  Aug.  17. 

Texas  declared  independence,  Nov.  7. 

Great  New  York  fire.     Loss  $20,000,000,  Dec.  16. 

Chicago  opened  her  first  bank  and  organized  a  fire  de- 
partment. 

The  first  house  was  built  on  the  site  of  San  Francisco. 

Samuel  Colt  began  the  manufacture  of  the  revolving  pistol. 

The  circular  web  knitting-machine  invented  in  Connecticut. 

Horseshoes  were  first  made  by  machinery  by  Henry  Bur- 
den, at  Troy. 

Improved  methods  of  minting  introduced  from  Europe  by 
Franklin  Peale. 

Pins  first  made  by  machinery  in  New  York. 

Gas  companies  organized  in  Philadelphia  and  New  Orleans. 

The  "New  York  Herald"  established. 

The  first  furnaces  made  in  New  England  by  William  A. 
Wheeler,  of  Worcester,  Mass. 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


Professor  Morse  exhibited  his  telegraph  in  the  University 
of  New  York. 

First  link  in  rail  connection  of  New  York  and  Boston  formed 
by  the  opening  of  the  Boston  and  Providence  Railroad. 

1836. 

President  Nicholas  Biddle  secured,  on  Feb.  13,  a  charter 
from  the  State  of  Pennsylvania  for  the  Bank  of  the  United 
States,  the  Federal  charter  of  which  expired  March  30. 

Arkansas  admitted  to  the  Union,  June  15. 

Specie  Circular  issued,  July  II. 

First  patent  of  friction  match  granted  Alonzo  D.  Phillips, 
of  Springfield,  Mass.,  Oct.  24. 

United  States  Patent  Office  and  contents  burned,  Dec.  15. 

The  manufacture  of  fine-cut  chewing  tobacco  by  machinery 
commenced  at  Centreville,  Miss. 

Brigham  Young  was  elected  president  of  the  Mormons. 

First  sleeping-car  ran  on  the  Cumberland  Valley  Railroad. 

First  transatlantic  cotton  freight  steamship  built  for  Savan- 
nah merchants. 

The  first  cargo  of  wheat  shipped  on  Lake  Michigan  for 
Buffalo. 

Astor  House  opened  in  New  York. 

First  American  patent  issued  for  a  typewriting  machine. 

E,  R.  Campbell  patented  the  coupling  together  of  two  pairs 
of  locomotive  driving-wheels. 

Rubber  belting  patented. 

Power  presses  introduced  for  magazine  and  newspaper 
printing. 

James  Atwater,  of  New  York,  brought  out  the  illuminated 
case  stove. 

J.  &  L.  K.  Bridge  imported  from  Sicily  the  first  cargo  of 

flaxseed. 

1837. 

Fire  at  Charleston,  S.  C.,  Apr.  27,  destroyed  1 158  buildings. 

Michigan  admitted  to  the  Union,  Jan.  26. 

Martin  Van  Buren  inaugurated,  March  4. 

Suspension  of  banks  and  general  panic,  May  IO. 

Sub-treasuries  recommended  by  President  Van  Buren, 
Sept.  4. 

Pitts  Brothers  patented  the  combined  threshing  and  clean- 
ing-machine, Dec.  29. 

Chicago  incorporated  as  a  city. 

Capt.  John  Ericsson  successfully  applied  the  screw  pro- 
peller to  steam  vessels. 

The  fancy  weaving  loom  was  patented  by  William  Crompton. 

Canning  of  corn  commenced  at  Philadelphia  by  Thomas  B. 
Smith. 

Counterbalance  weights  introduced  for  locomotive  driving- 
wheels. 

1838. 

Fire  at  Charleston,  S.  C.,  Apr.  27,  destroying  1158  buildings. 

The  Specie  Circular  repealed,  May  31. 

Congress  constituted  every  railroad  a  postal  route,  July  7. 

Capt.  Charles  Wilkes  started  on  his  South  Sea  explora- 
tions, Aug.  18. 

The  National  Silk  Society  organized  at  Baltimore,  Dec.  II. 

First  New  Jersey  zinc  ores  smelted  at  Washington. 

Branch  United  States  mint  established  at  Dahlonega,  Ga. 

The  Smithsonian  Institution  founded  in  Washington. 

Solid  pin  heads  first  manufactured  at  Birmingham,  Conn. 

Dimond  Chandler  began  the  manufacture  of  gold  spectacles 
and  silver  thimbles  at  Longmeadow,  Mass. 

Elisha  H.  Root,  of  Collinsville,  Conn.,  invented  the  first 
machine  for  punching  and  making  the  eyes  of  axes,  hatchets, 
and  hammers. 


First  shipment  of  wheat  from  Chicago. 
David  Bruce  Jr.,  invented  the  type-casting  machine. 
First  tiles  made  by  Abraham  Miller  at  Philadelphia. 
Steam  introduced  in  heating  processes  in  sugar-refining. 

1839. 

The  first  express  started  by  W.  F.  Harnden  between  New 
York  and  Boston,  March  4. 

The  United  States  Bank,  rechartered  by  the  State  of  Penn- 
sylvania, failed,  Oct.  10. 

John  William  Draper,  professor  of  chemistry  in  University 
of  New  York,  took  the  first  photograph  from  life,  November. 

Hot-water  heating  introduced  at  Niblo's  conservatory. 

The  ice-plow  invented. 

First  pottery  built  at  East  Liverpool,  O. 

1840. 

Adams  Express  commenced  between  New  York  and  Bos- 
ton, May  4. 

First  successful  iron-furnace  with  anthracite  and  hot-blast 
fired  by  David  Thomas  at  Catasauqua,  Pa.,  July  4. 

Steamship  Britannia,  the  first  Cunard  liner,  left  Liverpool 
for  New  York,  July  4. 

The  Sixth  Census  gave  the  population  of  the  country  as 
17,069,453. 

The  first  castings  for  structural  iron  made. 

John  Ames,  of  Springfield,  Mass.,  patented  the  first  machine 
for  making,  ruling,  and  cutting  paper. 

Henry  Disston  commenced  the  manufacture  of  saws. 

Patent  for  the  electric  telegraph  issued  to  Professor  Morse. 

Jonas  dickering  patented  the  grand  piano  with  full  iron- 
frame. 

First  advertising  agency  opened  in  Philadelphia  by  Volney 
B.  Palmer. 

The  manufacture  of  blasting-powder  begun. 

Edwin  Hodges  built  first  brass-wire-drawing  mill  at  West 
Torrington,  Conn. 

The  American  buggy  first  came  into  general  use. 

A  walking-beam  electric  engine  constructed  by  Davis  & 
Cooke. 

1841. 

William  Henry  Harrison  inaugurated,  March  4. 

President  Harrison  died  and  Vice-president  Tyler  suc- 
ceeded him,  Apr.  4. 

First  edition  of  Horace  Greeley's  Tribune,  Apr.  10. 

First  steam  fire-engine  completed  and  used  in  New  York, 
July. 

President  Tyler  vetoed  a  bill  for  a  United  States  Bank, 
Aug.  16. 

A  second  bill  for  a  United  States  Bank  vetoed,  Sept.  9. 

The  india-rubber  ball  patented  by  Edwin  Chaffee,  of  Cam- 
bridgeport. 

Congress  passed  a  general  bankruptcy  law. 

Samuel  Slocum,  of  New  York,  invented  a  machine  to  stick 
pins  in  paper. 

The  manufacture  of  the  metal  stencil  was  begun  in  Boston 
by  John  Pope. 

First  electrotypes  appeared  in  "  Mapes'  Magazine." 

Frederick  E.  Sickles  invented  the  drop  cut-off  valve  gear  for 
steam-engines. 

The  first  mercantile  agency  established. 

Making  of  Connellsville  coke  commenced. 

Canning  of  Maine  salmon  begun. 

The  city  of  Philadelphia  acquired  its  own  gas  plant. 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


1842. 

Dorr's  Rebellion  in  Rhode  Island,  May  18. 

Fremont's  first  western  expedition,  June  10. 

Croton  water  was  let  into  the  Fifth  Avenue  aqueduct,  July  4. 

Professor  Morse  laid  first  submarine  telegraph  wire  between 
New  York  and  Governor's  Island,  Oct.  18. 

President  proclaimed  treaty  settlement  with  England  of 
the  Northwestern  Boundary  question,  Nov.  10. 

The  first  attempt  at  a  machine  for  sewing  was  made  by  J. 
J.  Greenough,  but  proved  impracticable. 

Reuben  Partridge  patented  the  match-splint  machine. 

John  Ryle  built  the  first  silk  piece  loom  at  Paterson,  N.  J. 

Walworth  &  Nason  introduced  the  Perkins  hot-water  heater. 

Thomas  Kingsford  discovered  and  perfected  a  process  for 
making  starch  from  corn. 

American  ice  first  exported  to  London. 

First  factory  for  pocket-knives  established  in  Connecticut 

1843. 

Ericsson  built  the  Princeton,  the  first  screw  war  vessel 
in  the  world. 

Napoleon  E.  Guerin  introduced  hatching  of  eggs  by  arti- 
ficial heat. 

The  manufacture  of  manilla  grass  paper  was  begun  in  Bos- 
ton by  Lyman  Hollingsworth. 

Improvement  in  pills  patented  by  Benjamin  Brandreth. 

Patent  issued  to  Enos  Wilder  for  the  first  fire-proof  safe. 

Congress  voted  an  appropriation  of  $30,000  to  Professor 
Morse  for  an  experimental  telegraph  line  between  Washington 
and  Baltimore. 

1844. 

Prof.  Morse  sent  a  telegraphic  message  from  Baltimore 
to  Washington,  May  27. 

Treaty  with  China  opened  several  ports  there  to  trade  and 
residence,  July  3. 

United  States  recognized  the  independence  of  the  Sand- 
wich Islands,  July  6. 

U.  A.  Boyden  built  the  first  turbine  water  wheel  for  a 
Lowell  cotton  mill,  August. 

Williams  &  Ketcham  patented  the  first  mowing-machine, 
Nov.  18. 

Copper  mining  was  commenced  in  the  Lake  Superior  region. 

Patent  granted  to  Charles  Goodyear  for  the  vulcanization 
of  rubber. 

First  wall-paper  printing-machine  imported  from  England. 

Leverett  Candee  made  first  boots  and  shoes  from  vulcanized 
rubber. 

Power-loom  for  ingrain  carpets  invented  by  Erastus  B. 
Bigelow. 

A.  D.  Puffer,  of  Boston,  secured  a  patent  for  the  first  soda- 
water  cooler. 

1845. 

President  Tyler  authorized  the  annexation  of  Texas,  Mar.  i. 

Florida  admitted  to  the  Union,  March  3. 

James  K.  Polk  inaugurated,  March  4. 

Telegraph  line  between  Baltimore  and  Washington  opened 
for  the  public  business,  April  I. 

Fire  did  $10,000,000  damage  in  Pittsburg,  Apr.  10. 

Naval  Academy  founded  at  Annapolis,  Oct.  10. 

Texas  admitted  to  the  Union,  Dec.  29. 

Anti-rent  riots  in  New  York  State. 

Borings  in  Tarentum,  Pa.,  struck  petroleum. 

E.  B.  Bigelow  invented  the  carpet-loom. 

The  manufacture  of  files  was  commenced  at  Matteawan, 
N.Y.,  by  John  Rothery. 


Eastwiclc  &  Harrison  invented  the  equalizing  beam*  con- 
necting locomotive  driving-wheel*. 

First  shipment  of  apples  from  Boston  to  Glasgow. 

Sebastian  Chauveau,  of  Philadelphia,  introduced  the  nie  of 
machinery  in  making  confectionery. 

First  slate  quarry  in  Vermont  opened  by  Colonel  Allen  and 
Caleb  Ranney  at  Scotch  Hill. 

Lowest  price  on  record  for  cotton. 

1846. 

Magnetic  Telegraph  Company  organized  Jan.  14,  and  line 
completed  between  New  York  and  Philadelphia,  Jan.  18. 

War  declared  against  Mexico,  May  n. 

California  declared  independence  from  Mexico,  July  5. 

New  Mexico  annexed  by  the  United  States,  Aug.  aa. 

Elias  Howe,  Jr.,  patented  the  first  sewing-machine,  Sept.  10. 

The  anesthetic  property  of  ether  discovered  by  Dr.  Wil- 
liam T.  G.  Morton,  of  Boston,  Sept.  30. 

Iowa  admitted  to  the  Union. 

Mormons  selected  site  of  Salt  Lake  City. 

Japan  refused  to  open  commercial  relations  with  this  country. 

The  "  ten-wheel "  locomotive  introduced. 

Oliver  R.  Chase,  of  Boston,  built  first  machine  for  making 
lozenges. 

Eastern  Hotel,  in  Boston,  the  first  public  building  to  be 
heated  by  steam. 

First  iron  furnace  using  raw  bituminous  coal  erected  at 
Lowell,  Mahoning  County,  O. 

1847. 

Commodore  Shnhrick  proclaimed  the  annexation  of  Cali- 
fornia by  the  United  States,  Feb.  8. 

G.  Page  patented  the  revolving-disk  harrow,  August  7. 

The  City  of  Mexico  fell  to  General  Scott,  Sept.  14. 

Zinc  was  discovered  in  paying  quantities  in  Lehigh 
County,  Pa. 

Pig  iron  decarbonized  by  an  air-current  into  steel  by  Wil- 
liam Kelly,  of  Kentucky. 

Richard  M.  Hoe  patented  the  type-revolving  press. 

Farmer  constructed  an  electro-magnetic  locomotive  which 
drew  a  car  containing  two  persons. 

Use  of  adhesive  postage  stamps  first  authorized. 

Auction  sales  of  plants  and  flowers  begun  in  New  York. 

1848. 

John  M.  Marshall  discovered  gold  in  California,  Jan.  18. 

Treaty  of  peace  with  Mexico  signed  at  Guadeloupe  Hi- 
dalgo, Feb.  2. 

Astor  Library  founded,  May. 

Wisconsin  admitted  to  the  Union,  May  29. 

First  meeting  of  the  American  Association  for  the  Ad- 
vancement of  Science  held  at  Philadelphia,  Sept.  20. 

Cochituate  water  introduced  into  Boston,  Oct.  25. 

Machine  for  punching  and  pointing  wooden  pegs  patented 
by  Henry  P.  Westcott. 

Suspension  bridge  completed  across  the  Ohio  river  at 
Wheeling. 

Rogers  Locomotive  Works  shipped  locomotives  to  Cuba. 

First  cast-iron-front  building  in  the  world  erected  in  New 
York. 

Erastus  B.  Bigelow  invented  the  power-loom  for  weaving 
Brussels  and  tapestry  carpets. 

1849. 

First  diploma  to  woman  physician  granted  at  Geneva,  N.  Y., 
to  Elizabeth  Blackwell,  January. 

First  bank  established  in  San  Francisco,  Jan.  9. 


xxvi 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


Zachary  Taylor  inaugurated,  March  5. 

Great  inundation  at  New  Orleans,  March. 

Astor  Place  Opera  House  riots,  May  10. 

Asiatic  cholera  epidemic  in  New  Orleans,  New  York,  St. 
Louis,  Philadelphia,  Nashville,  Buffalo,  Chicago,  and  Boston, 
August. 

Connecticut  river  successfully  dammed  for  utilization  of 
water-power,  Oct.  22. 

Overland  rush  for  California  commenced. 

The  improved  steam-engine  valve  patented  by  George  H. 
Corliss. 

Department  of  the  Interior  organized  with  Thomas  Ewing 
as  first  Secretary. 

New  York  Associated  Press  founded. 

Henry  Evans  of  Newark  introduced  the  pendulum  press 
for  can  tops. 

1850. 

The  first  meeting  of  influential  men  was  held  at  Phila- 
delphia to  consider  the  question  of  a  transcontinental  railroad, 
Apr.  I. 

First  number  of  Harper's  Magazine  was  published,  June. 
Clayton-Bulwer  Treaty  promulgated,  July  4. 
President  Taylor  died,  July  9. 

Vice-president  Millard  Fillmore  succeeded  to  the  chair, 
July  10. 

The  manufacture  of  watches  by  machinery  was  commenced 
in  Boston  by  Dennison,  Howard,  and  Davis,  July. 
Fugitive  Slave  Bill  passed,  Aug.  23. 
California  admitted  to  the  Union,  Sept.  9. 
The  Seventh  Census  gave  the  population  of  the  country  as 
22,191,876. 

S.  S.  Putnam,  of  Neponset,  Mass.,  began  the  manufacture 
of  nails  for  horse  shoes  by  machinery. 

Collins  Line,  the  first  American  line  of  steamships  to  Liver- 
pool, established  under  government  subsidy. 
Export  of  coal  first  attained  commercial  importance. 
First  ice  machine  patented. 

Thomas  Kingsford  discovered  the  food  properties  of  corn- 
starch. 

Machinery  first  came  into  use  in  the  boot  and  shoe  shops. 
The  manufacture  of  reed  organs  commenced. 
Page,  of  Washington,  constructed  an  electro-magnetic  loco- 
motive of  sixteen  horse-power. 

1851. 

Minot's  Ledge  Light  carried  away,  Apr.  16. 

Fire  did  $3,000,000  damage  at  San  Francisco,  May  3. 

Southern  Rights  Convention  held  at  Charleston,  May  8. 

New  York  and  Lake  Erie  Railroad  completed  from  Pier- 
mont  to  Dunkirk,  May  14. 

A  second  fire  destroyed  $3,000,000  more  property  in  San 
Francisco,  June  22. 

Nicaragua  route  between  New  York  and  San  Francisco 
opened,  Aug.  12. 

Hudson  River  Railroad  completed  from  New  York  to  Al- 
bany, Oct.  8. 

Louis  Kossuth  arrived  on  his  visit  to  this  country,  Dec.  5. 

Principal  room  of  the  Library  of  Congress  destroyed  by 
fire,  Dec.  14. 

The  canal  from  Evansville,  Ind.,  to  Lake  Erie  completed. 

Postal  rate  established  at  three  cents  per  half  ounce  for  dis- 
tance less  than  3000  miles. 

Nelson  Goodyear  patented  process  for  making  hard  rubber. 

A.  C.  Gallahue,  Elmer  Townsend  and  B.  F.  Sturtevant 
patented  a  pegging  machine  which  cut  and  drove. 

Western  Union  Telegraph  Company  established. 


Electric  locomotive  taking  its  power  from  a  stationary  bat- 
tery constructed  by  Thomas  Hall,  of  Boston. 

Cyrus  H.  McCormick  wins  a  great  victory  with  his  reaping- 
machine  at  the  World's  Fair  in  London. 

1852. 

Fisheries  dispute  with  England,  May  26. 

Fire  did  $5,000,000  damage  at  Sacramento,  Nov.  2. 

Commodore  Perry  started  for  Japan  on  his  special  mis- 
sion to  open  up  commerce  there,  Nov.  24. 

United  States  refused  to  join  England  and  France  in  a  per- 
petual renunciation  of  annexation  designs  on  Cuba,  Dec.  I. 

The  electric  telegraph  fire-alarm  introduced  in  Boston. 

American  Pharmaceutical  Association  organized. 

First  paints  ready  mixed  for  use,  made. 

Maker's  stamp  on  boiler-plate  first  demanded  by  law. 

Tilton,  Pepper  &  Scudder  start  the  first  plate-glass  works 
in  Brooklyn. 

First  pottery  in  Trenton  built  by  Speeler,  Taylor  &  Bloor. 

Lamp  chimneys  first  manufactured  by  Christopher  Dor- 
flinger  in  Brooklyn. 

1853. 

Ericsson's  caloric  ship  made  its  trial  trip,  Jan.  II. 

Franklin  Pierce  inaugurated,  March  4. 

Capt.  Ringgold's  South  Sea  expedition  sailed,  May. 

World's  Fair  opened  at  the  Crystal  Palace,  in  New  York, 
July  14. 

Commodore  Perry  presented  to  Japan  the  President's  desire 
to  establish  commercial  relations,  July  14. 

Purchase  of  Central  Park  authorized,  July  23. 

New  York  Clearing  House  established,  Oct.  11. 

The  first  paper  collar  was  seen  in  New  York. 

Lumber-rafting  inaugurated  by  Schulenberg  &  Borckler. 

United  States  Pottery  Company  of  Bennington  made  first 
inlaid-flooring  tiles. 

Steam  fire-engines  put  into  permanent  service  in  Cincinnati. 

Yellow  fever  epidemic  at  New  Orleans  caused  7848  deaths. 

1854. 

Cyrus  Field,  Peter  Cooper,  and  others  organized  the  New 
York,  Newfoundland  and  London  Telegraph  Company,  Mar.  I. 

The  Homestead  Bill  passed  by  Congress  to  encourage  set- 
tlement on  the  public  lands,  March  3. 

Treaty  with  Japan  signed,  March  31. 

Kansas  Nebraska  bill  passed,  May. 

Reciprocity  Treaty  concluded  with  England  concerning  the 
Newfoundland  fisheries,  June  7. 

Otis  Tufts  patented  an  elevator  for  hotels,  Aug.  9. 

The  steamship  Arctic  lost  at  sea  and  350  people  perished, 
Sept.  27. 

The  Pennsylvania  Rock  Oil  Company,  the  first  petroleum 
company,  incorporated  in  New  York,  Dec.  30. 

Registry  system  established  by  the  post-office. 

The  first  merchant  flouring-mill  started  in  Minneapolis. 

Mellier  process  for  straw-paper  brought  out  by  A.  C.  Mel- 
lier. 

G.  D.  Dows  introduced  in  Boston  the  first  marble  soda 
fountain. 

1855. 

The  first  bridge  across  the  Mississippi  river  completed  at 
Minneapolis,  Minn.,  January. 

The  railroad  between  Panama  and  Colon  completed,  Jan.  28. 

Suspension  bridge  at  Niagara  completed,  March. 

Cotton-seed  oil  first  successfully  made  by  Paul  Aldige  at 
New  Orleans. 


ONE    HUNDRED    YEARS   OF   AMERICAN   COMMERCE 


Hugh  Burgess  patented  chemical  wood  pulp. 
Year  of  the  country's  greatest  maritime  construction. 
Vacuum  pan  introduced  in  the  sugar  refineries. 
Yellow  fever  ravaged  Norfolk  and  Portsmouth,  Va. 

1856. 

First  telegraph  cable  laid  across  the  Hudson  at  New  York, 
Feb.  12. 

The  first  railroad  in  California  was  completed,  Feb.  22. 

Central  Park  purchased  for  $5,398,695,  February. 

The  first  street-railroad  in  New  England  began  running  be- 
between  Boston  and  Cambridge,  March  26. 

George  Esterly  patented  a  corn  cultivator,  April  22. 

New  York,  Newfoundland,  and  London  Electric  Telegraph 
Company  organized,  May  6,  and  cable  laid  to  Newfoundland. 

Statue  of  George  Washington  was  unveiled  in  Union  Square, 
July. 

Gail  Borden  patented  condensed  milk,  Nov.  4,  and  its  man- 
ufacture commenced  at  Litchfield,  Conn. 

Bessemer  steel  first  made  at  Phillipsburg,  N.  J. 

Cyrus  W.  Field  established  telegraphic  communication  with 
Newfoundland. 

Sorghum  was  introduced. 

The  first  vessel  made  the  passage  from  Milwaukee  to  Eu- 
rope via  the  Welland  Canal,  Great  Lakes,  and  St.  Lawrence 
river. 

First  refined  spelter  made  at  Bethlehem,  Pa. 

Borax  discovered  in  California. 

Use  of  the  adhesive  postage-stamp  made  compulsory. 

1857. 

James  Buchanan  inaugurated,  March  4. 

Dred  Scott  decision,  March  6. 

First  great  strike  and  railroad  riots  commenced  on  the  Balti- 
more and  Ohio,  Apr.  27. 

Pennsylvania  Railroad  bought  for  $7,500,000  the  railway 
and  canal  system  built  by  the  State,  June  25. 

Police  riots  began  in  New  York,  July  3. 

Ohio  Life  and  Trust  Company  suspended,  and  a  financial 
panic  followed,  Aug.  24. 

First  and  unsuccessful  attempt  to  lay  a  transatlantic  tele- 
graph cable,  August. 

Specie  payment  suspended,  Oct.  15. 

Resumption  of  specie  payment,  Dec.  4. 

General  Rodman  began  his  experiments  to  discover  pressures 
in  the  bores  of  guns  at  the  moment  of  firing. 

The  Steamship  Central  America,  having  on  board  $7,800,- 
ooo  of  treasure  from  California,  foundered  off  the  Cuban  coast. 

The  manufacture  of  straw-paper  begun  by  J.  B.  Falser  at 
Fort  Edward. 

Japan  teas  appeared  in  the  market 

1858. 

Minnesota  admitted  to  the  Union,  May  1 1 . 
First  transatlantic  cable  successfully  laid,  Aug.  4. 
First  message  sent  over  the  transatlantic  cable,  Aug.  16. 
Peter  Cooper  presented  Cooper  Union  to  the  public. 
Gold  was  discovered  at  Pike's  Peak,  Colorado. 
Wells,  Fargo  &  Company  established  the  Overland  Mail 
Company. 

First  cut  loaf  sugar  made  in  this  country. 
Greasing-machine  patented  by  W.  K.  Thornton,  of  Michigan. 
E.  S.  Drake  sank  the  first  petroleum  well  at  Titusville,  Pa. 

1859. 

Oregon  admitted  to  the  Union,  Feb.  14. 
Treaty  with  China,  Aug.  16. 


John  Brown's  Raid  on  Harper's  Ferry,  Oct.  16. 
D£but  of  Adelina  Patti  in  opera  in  New  York,  Nov.  24. 
The  improved  grand  piano  patented  by  Steinway,  Dec.  20. 
Photolithography  for  maps  in  colors  was  introduced. 
First  shipment  of  flour  from  Minneapolis  to  the  Eait. 
Farmer  invented  the  self-exciting  dynamo  to  take  the  place 
of  the  galvanic  battery. 

1860. 

1 1 7  operatives  killed  and  312  injured  by  collapse  of  the  Pem- 
berton  Cotton  Mills  in  Lawrence,  Mass.,  Jan.  10. 

The  chain  of  railroads  was  completed  from  Bangor,  Me.,  to 
New  Orleans,  January. 

The  Japanese  ambassadors  to  ratify  Perry's  Treaty  arrived 
at  San  Francisco,  March  27. 

The  Great  Eastern  arrived  at  New  York,  June  28. 

Colonel  William  Walker,  the  famous  filibuster  in  Central 
America,  was  shot  at  Truxillo,  Sept.  12. 

The  Prince  of  Wales  arrived  at  Washington  and  visited  the 
President,  Oct.  3. 

South  Carolina  seceded  from  the  Union,  Dec.  20. 

Central  Park  was  opened  to  the  public. 

The  Eighth  Census  gave  the  population  of  the  country  as 
31,443,321. 

The  "  oil  fever  "  broke  out  in  the  Alleghany  River  valley. 

American  merchant  marine  at  the  point  of  its  greatest  pros- 
perity. 

First  importations  of  Sisal  hemp. 

Salt  first  attained  commercial  importance  in  Michigan. 

The  transcontinental  telegraph  sanctioned  by  Congress. 

First  wrought-iron  I-beams  rolled  by  Peter  Cooper  at  Tren- 
ton. 

Alexander  Smith  and  Halcyon  Skinner  of  Yonkers  secured 
a  patent  for  power-loom  to  weave  Axminster  and  Moquette 
carpets. 

Centrifugal  machine  introduced  in  the  sugar  refineries. 

1861. 

First  shot  of  the  Rebellion  was  fired  in  Charleston  harbor 
against  Star  of  the  West,  Jan.  9. 

Mississippi  seceded,  Jan.  9. 

Florida  seceded,  Jan.  10. 

Alabama  seceded,  Jan.  II. 

Georgia  seceded,  Jan.  19. 

Louisiana  seceded,  Jan.  26. 

Kansas  admitted  to  the  Union,  Jan.  29. 

North  Carolina  seceded,  Jan.  30. 

Texas  seceded,  Feb.  I. 

First  flowing  oil-well  struck  in  Pennsylvania,  Feb.  I. 

Provisional  Confederate  Government  organized  at  Mont- 
gomery, Ala.,  Feb.  9. 

Jefferson  Davis  inaugurated  president  of  the  Confederacy, 
Feb.  19. 

Abraham  Lincoln  inaugurated,  Mar.  4. 

Fort  Sumter  fell,  Apr.  14. 

Virginia  seceded,  Apr.  17. 

Stephen  A.  Douglas  died,  June  3. 

First  balloon  reconnaissances,  June  23. 

Battle  of  Bull  Run,  July  21. 

Telegraphic  communication  opened  between  St.  Louis  and 
San  Francisco,  Oct.  25. 

Capt.  Wilkes  boarded  British  steamship  Trent  and  seized 
Mason  and  Slidell,  Nov.  8. 

First  message  sent  over  the  transcontinental  telegraph  line, 
Nov.  15. 

Banks  suspended  cash  payments,  Dec.  30. 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


Stereotyping  for  newspapers  introduced  by  the  "New- York 
Tribune  "  and  "  New- York  Herald." 
The  McKay  sewing-machine  patented. 

1862. 

Mason  and  Slidell  released  and  sail  for  Europe,  Jan.  I. 

First  legal  tender  act  passed,  Feb.  25. 

Battle  between  the  Monitor  and  the  Merrimac,  March  9. 

The  National  Guard  created  by  New  York,  April. 

Farragut  captured  New  Orleans,  Apr.  24. 

Revenue  tax  imposed  on  spirits,  July  I. 

Union  Pacific  Railroad  chartered,  July  I. 

Postage  stamps  used  for  fractional  currency,  July. 

Announcement  of  the  Emancipation  Proclamation,  Sept.  22. 

Dr.  R.  J.  Catling  completed  the  first  Galling  gun  at  In- 
dianapolis, Ind.,  Nov.  4. 

Lockhart  &  Company  export  first  shipment  of  American  oil. 

Chicago  became  the  recognized  center  of  the  packing  in- 
dustry. 

Confederate  cruiser  Alabama  captured  and  burned  ten  mer- 
chantmen in  two  weeks. 

Brewers'  Association  organized. 

1863. 

3,120,000  slaves  freed  by  the  Emancipation  Proclamation, 
Jan.  I. 

The  National  Academy  of  Science  created  by  Congress, 
March  3. 

West  Virginia  admitted  to  the  Union,  June  19. 

Certificate  of  authority  of  the  Comptroller  of  the  Currency 
issued  to  the  first  of  the  present  national  banks,  June  20. 

Battle  of  Gettysburg,  July  1-3. 

Draft  Riots  in  New  York,  July  13-17. 

Habeas  corpus  suspended,  Sept.  15. 

Distance  limit  for  letter  postage  in  the  United  States  re- 
moved. 

First  harness-thread  factory  established  at  Paterson,  N.  J., 
by  Barbour  Brothers. 

Henry  Disston  built  first  crucible-steel  melting  plant  for 
saw  steel. 

The  channeling-machine  invented  by  George  J.  Wardwell 
of  Rutland,  Vt. 
The  so-called  musical  telephone  brought  out  by  Reis. 

1864. 

Funding  of  the  greenbacks  in  the  six  per  cents,  stopped, 
Jan.  21. 

Sanitary  Fair  opened  at  Philadelphia,  June  7. 

Battle  between  the  Kearsarge  and  Alabama,  June  19. 

Gold  dollar  was  worth  $2.85,  July  n. 

Nevada  admitted  to  the  Union,  Oct.  31. 

From  Dec.  1861  to  October  1869,  the  advance  in  the  price 
of  cotton  goods  had  been  1000  per  cent. 

Columbia  College  School  of  Mines  organized,  Nov.  15. 

General  Sherman  left  Atlanta  for  the  Sea,  Nov.  16. 

Northern  Pacific  Railroad  chartered. 

Postal  money-order  system  established. 

George  M.  Pullman  built  the  "  Pioneer,"  his  first  car. 

1865. 

Union  troops  entered  Richmond,  Apr.  2. 
Lee  surrendered,  Apr.  9. 
President  Lincoln  assassinated,  Apr.  14. 
Andrew  Johnson  succeeded  to  the  presidency,  Apr.  15. 
Johnston  surrendered,  April  26. 


Jefferson  Davis  captured,  May  II. 
First  rail  laid  on  the  line  of  the  Union  Pacific,  July. 
Capt.  Wirz,  jailer  of  Andersonville  Prison,  hanged,  Aug.  21. 
All  restrictions  removed  from  Southern  ports,  Sept.  I. 
Martial  law  ended  in  Kentucky,  Oct.  12. 
Habeas  corpus  restored  in  the  Northern  States,  Dec.  I. 
National  Wool  Growers'  Association  organized,  December. 
The  Bullock  perfecting  press  brought  out. 
Polished  plate  glass  first  made  at  Lenox,  Mass. 
New  York  Stock  Exchange  moved  into  its  present  building, 
Broad  and  Wall  streets. 

1866. 

France  acceded  to  request  of  United  States  to  withdraw 
troops  from  Mexico,  Jan.  9. 

President  Johnson  publicly  denounced  the  Reconstruction 
Committee,  Feb.  22. 

The  President  proclaimed  the  Rebellion  at  an  end,  Apr.  2. 

Civil  Rights  Bill  passed  over  President's  veto,  Apr.  9. 

Jefferson  Davis  indicted  for  complicity  in  the  assassination 
of  Lincoln,  May  8. 

Fenian  invasion  of  Canada,  June  I. 

Commercial  convention  concluded  with  Japan,  June  25. 

Fire  did  $10,000,000  damage  at  Portland,  Me. ,  July  4. 

Tennessee  restored  to  the  Union  by  Congress,  July  23. 

The  second  Atlantic  cable  successfully  laid,  Aug.  16. 

Convention  of  workingmen  at  Baltimore  made  first  demand 
for  an  eight-hour  working  day,  Aug.  21. 

The  lost  Atlantic  cable  of  1865  brought  up,  spliced,  and  laid, 
September. 

Congress  established  the  elective  franchise  without  respect 
to  race  or  color  in  the  District  of  Columbia,  Dec.  14. 

Daniel  G.  Chase,  of  Chicago,  patented  a  machine  for  mak- 
ing conversation  lozenges. 

National  Board  of  Fire  Underwriters  organized. 

Salmon  canning  on  the  Columbia  river  begun. 

Steinway  &  Son  perfected  and  introduced  the  upright  piano. 

Tallemont  &  Carrol  patented  the  velocipede  with  two 
wheels. 

1867. 

French  troops  evacuated  the  City  of  Mexico,  Feb.  5. 

Nebraska  admitted  to  the  Union,  March  I. 

Military  Reconstruction  Bill  passed,  March  2. 

National  Bankruptcy  Bill,  March  2. 

Jefferson  Davis  released  on  $100,000  bail,  May  13. 

The  President  removed  Secretary  of  War  Stanton,  Aug.  12. 

First  steel  rails  rolled  by  Cambria  Iron  Company  of  Johns- 
town, Pa.,  August. 

The  President  proclaimed  general  amnesty  to  all  who  took 
part  in  the  Rebellion,  Sept.  7. 

Alaska  purchased  from  Russia  for  $7,200,000,  Oct.  9. 

Convention  of  the  manufacturers  of  the  country  at  Cleve- 
land, O.,  demanded  the  full  payment  of  the  national  debt, 
Dec.  18. 

Pullman  Palace  Car  Company  organized. 

First  consignment  of  California  green  fruit  received  in  New 
York. 

Ground  wood  pulp  first  put  into  printing  paper. 

Hard-rubber-covered  harness  trimmings  patented  by  An- 
drew Albright,  of  Newark. 

American  Institute  of  Architects  founded. 

Master  Car  Builders'  Association  organized. 

1868. 

The  non-concurrence  in  removal  of  the  Senate  returned 
Secretary  Stanton  to  the  War  Department,  Jan.  13. 
Fire  did  $3,000,000  damage  in  Chicago,  Jan.  28. 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


House  resolved   that    President   Johnson  be   impeached, 
Feb.  22. 
Race  riots  between  Irish  and  German  immigrants  on  Ward's 

Island,  March  $. 

Impeachment  trial  of  President  Johnson  begun,  March  J. 

Memorial  Statue  of  Abraham  Lincoln  unveiled  at  Washing- 
ton, Apr.  15. 

Secretary  Stanton  finally  retired  and  succeeded  by  Gen. 
John  M.  Scliofield,  Apr.  26. 

North  Carolina,  South  Carolina,  Louisiana,  Georgia,  Ala- 
bama, and  Florida  again  admitted  to  representation  in  the 
Union,  June  12. 

Arkansas  readmitted  to  the  Union,  June  20. 

New  treaty  with  China,  July  4. 

A  majority  of  the  States  adopted  the  Fourteenth  Amend- 
ment to  the  Constitution,  July  20. 

Congress  passed  bill  providing  for  the  payment  of  the  na- 
tional debt,  July  25. 

Gen.  Grant  abolished  by  proclamation  the  military  districts 
as  authorized  by  the  Reconstruction  Act,  July  28. 

President  Johnson  acquitted  on  impeachment  proceedings. 

First  Westinghouse  air-brake  used  on  the  Pittsburg,  Cin- 
cinnati and  St.  Louis. 

Improved  typewriting  machine  patented  by  C.  Latham 
Sholes. 

First  Siemens-Martin  open-hearth  furnace  built  at  the  New 
Jersey  Steel  and  Iron  Company's  works  at  Trenton. 

1869. 

Great  Niagara  Suspension  Bridge  opened,  Jan.  I. 

Improvements  to  East  River  channel  began  at  Hell  Gate, 
Jan.  li. 

Ulysses  S.  Grant  inaugurated,  March  4. 

First  transcontinental  railroad  completed  by  the  junction 
of  the  Union  and  Central  Pacific,  May  15. 

United  States  end  of  first  Franco-American  cable  landed 
at  Duxbury,  Mass.,  July  23. 

Ground  broken  in  the  construction  of  the  New  York  Post- 
Office  by  Col.  Joseph  Dodd,  Aug.  9. 

Black  Friday  in  Wall  Street,  Sept.  24. 

Treaty  negotiated  for  the  annexation  of  San  Domingo,  but 
rejected  by  Senate,  Nov.  29. 

Cable  screw-wire  machine  for  boot  and  shoe  manufacture 
invented. 

System  of  traveling  theatrical  companies  introduced. 

1870. 

Hiram  R.  Revels  of  Mississippi,  the  first  colored  man  elected 
to  the  United  States  Senate,  Feb.  25. 

President  proclaimed  Fifteenth  Amendment  ratified  by  the 
States,  March  30. 

Attorney  General  Hoar  and  Secretary  of  the  Interior  Cox 
resigned,  June  20. 

Kansas  Pacific  Railroad  opened  to  Denver,  Aug.  15. 

President  proclaimed  neutrality  in  Franco-Prussian  trou- 
bles, Aug.  22. 

General  Robert  E.  Lee  died,  aged  sixty-three,  Oct.  12. 

The  Ninth  Census  gave  the  population  of  the  country  as 
38,558,783. 

Mississippi,  Texas,  and  Virginia  restored  to  the  Union. 

Terra-cotta  first  generally  used  for  building  purposes. 

Soleil's  polariscope  introduced  into  this  country. 

Single  or  continuous  process  for  making  wall-paper  intro- 
duced. 

Bigelow  attacher  and  heeling  machine  introduced  in  shoe 
factories. 


Granger  movement  began  in  Illinois. 
Rhode  Island  passed  first  of  the  drug  law*. 
Chicago-Omaha  railroad  pool. 

Advertisements  in  magazines  first  largely  published  by 
Scribner's  Monthly. 

1871. 

Income-tax  law  repealed,  Jan.  26. 

To  relieve  the  destitution  in  France  caused  by  the  Franco- 
Prussian  War,  A.  T.  Stewart,  the  New  York  merchant,  sent  a 
$50,000  cargo  of  flour  to  Havre,  Feb.  25. 

Congress  passed  the  bill  for  a  centennial  celebration  in  1876, 
March  3. 

The  first  Civil  Service  Commission  was  authorized,  March  3. 
Charles  Sumner  was  removed  from  the  chairmanship  of  the 
Senate  Committee  on  Foreign  Relations,  March  9. 

United  States  and  England  agreed  to  submit  Alabama  claims 
to  arbitration,  May  8. 

Ship  canal  across  the  Isthmus  of  Darien  reported  feasible 
by  Commander  Selfridge,  United  States  Navy,  July. 

Anti-Tweed  mass  meeting  in  New  York  upon  the  dis- 
covery of  his  gigantic  frauds,  Sept.  24. 

The  great  Chicago  fire  destroyed  $200,000,000  worth  of 
properly  in  that  city,  and  250  lives  were  lost,  Oct.  8. 

The  Post-Office  extended  its  money-order  system,  making 
it  international,  October. 

R.  Hoe  &  Company  complete  the  perfecting  press. 
Texas  Pacific  Railroad  incorporated. 

1872. 

Yellowstone  National  Park  created  by  Congress,  Feb.  27. 

Amnesty  Bill  passed  by  Congress  completed  the  political 
reorganization  of  the  country,  and  filled  every  seat  in  the  na- 
tional legislative  body,  May  22. 

Geneva  Tribunal  met,  and  $15,500,000  awarded  the  United 
States  on  the  Alabama  claims,  June  15. 

Import  duties  on  tea  and  coffee  abolished,  July  I. 

Great  fire  in  Boston;  damage  $75,000,000,  Nov.  9. 

The  Bonanza  mines  on  the  Comstock  Lode  discovered. 

First  iron  oil-tank  cars  used. 

Water-gas  process  patented  by  Lowe. 

Cable  grip  patented  by  Andrew  S.  Halliday. 

Hoffman  Brothers  made  first  practical  application  of  the 

band  saw. 

National  Stove  Manufacturers'  Association  organized. 
Carriage  Builders'  National  Association  organized. 

1873. 

Political  riots  in  New  Orleans,  March  I. 

The  annual  salary  of  the  President  of  the  United  States  fixed 
at  $50,000,  March  4. 

Chicago  celebrated  the  rebuilding  in  nineteen  months  of  the 
entire  section  laid  waste  by  the  great  fire,  June. 

Congress  abolished  the  franking  privilege,  July  I. 

Jay  Cooke  &  Co.,  the  New  York  bankers,  failed,  and  a  fi- 
nancial panic  ensued,  Sept.  18. 

Acquittal  of  Mayor  A.  Oakey  Hall  of  New  York  on  charges 
of  corruption,  Dec.  24. 

Westinghouse  automatic  air-brake  introduced. 

First  Lowe  apparatus  for  water-gas  erected  at  Philadelphia. 

Apparatus  for  hot  soda  water  patented. 

First  East  and  West  trunk  line  agreement  made  at  the  Sa- 
ratoga Conference. 

1874. 

Mill  River  dam  in  Massachusetts  burst,  destroying  four  vil- 
lages and  causing  the  loss  of  over  200  lives,  May  16. 


XXX 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


The  great  steel  bridge  across  the  Mississippi  at  St.  Louis 
completed  by  James  B.  Eads,  July  4. 

Fire  did  $4,000,000  damage  at  Chicago,  July  14. 

Shore  end  of  a  new  Atlantic  cable  landed  at  Rye  Beach,  N.  Y., 
July  15. 

The  Lincoln  monument  at  Springfield,  111.,  dedicated,  and 
the  remains  of  the  martyred  President  placed  in  the  crypt 
prepared,  Oct.  15. 

Bradford  oil  field  discovered,  Dec.  6. 

King  David  Kalakaua  of  the  Hawaiian  Islands  arrived  in 
Washington  on  a  visit  to  the  United  States,  Dec.  12. 

James  Lick,  of  San  Francisco,  deeded  millions  to  a  board 
of  trustees  to  be  used  in  benevolent  undertakings. 

Massachusetts  passed  a  ten-hour  law. 

First  trunk  pipe-line  from  oil  regions  to  Pittsburgh. 

Barbed-wire  manufacture  began  at  De  Kalb,  111. 

First  fast  mail  on  the  New  York  Central  Railroad. 
1875. 

Bloody  political  riots  in  New  Orleans,  Jan.  4. 

Senator  Sherman's  bill  for  the  resumption  of  specie  pay- 
ment passed  to  take  effect  Jan.  I,  1879,  Jan.  14. 

Hoosac  Tunnel  completed,  Feb.  9. 

Oshkosh  burned,  Apr.  28. 

Bank  of  California  in  San  Francisco  suspended,  Aug.  26. 

Vice-president  Henry  Wilson  died  and  was  succeeded  by 
Thomas  N.  Ferry,  President  pro  tern,  of  the  Senate,  Nov.  22. 

William  M.  Tweed  escaped  from  his  Ludlow  Street  jailers, 
Dec.  4. 

Secretary  Benjamin  H.  Bristow  exposed  the  whisky  frauds. 

First  use  of  natural  gas  as  a  fuel  in  glass-making  by  Roches- 
ter Tumbler  Works. 

The  Palace  Hotel  opened  in  San  Francisco. 

First  typewriting  machine  offered  for  sale. 
1876. 

Great  forgeries  by  E.  D.  Winslow,  of  Boston,  discovered, 
Jan.  24. 

Gen.  O.  E.  Babcock,  private  secretary  to  the  President, 
acquitted  of  complicity  in  the  whisky  frauds,  Feb.  7. 

Secretary  of  War  Belknap  resigned,  under  charges,  March  2 ; 
was  impeached  and  arrested,  March  8,  and  acquitted,  Aug.  I. 

Bell  secured  his  first  patent  for  the  telephone,  March  7. 

A.  T.  Stewart  died,  aged  seventy-three,  Apr.  10. 

Dom  Pedro,  Emperor  of  Brazil,  arrived  in  New  York  on  a 
visit  to  the  United  States,  Apr.  15. 

President  Grant  opened  the  Centennial  World's  Fair  in 
Philadelphia,  May  10. 

Peter  Cooper  was  nominated  for  the  presidency  by  the  Na- 
tional Greenback  party,  May  18. 

James  Bailey,  the  first  of  the  A.  T.  Stewart  cousins,  com- 
menced a  contest  over  the  will,  June. 

Secretary  of  the  Treasury  Bristow  resigned,  June  17. 

The  Custer  Massacre,  June  25. 

Colorado  admitted  to  the  Union,  Aug.  I. 

William  M.  Tweed  re-arrested  at  Vigo,  Spain,  and  returned 
to  New  York,  Sept.  6. 

Hallett's  Point  Ledge  removed  by  dynamite,  Sept.  24. 

The  first  cremation  furnace  completed  at  Washington,  Pa. 
Oct.  I. 

President  declared  South  Carolina  in  a  state  of  insurrec- 
tion, and  Federal  troops  were  stationed  at  the  polls,  Oct.  17. 

The  famous  Hayes-Tilden  presidential  election,  Nov.  J. 

The  Brooklyn  Theater  fire,  300  lives  lost,  Dec.  5. 

Exportation  of  dressed  beef  begun. 

Power-loom  for  hard-drawn  wire  cloth  invented  by  Wick- 
wire,  of  Cortlandt,  N.  Y. 


1877. 

Commodore  Cornelius  Vanderbilt  died,  aged  eighty-two, 
leaving  an  estate  of  $100,000,000,  Jan.  4. 

The  Special  Commission  announced  Hayes  elected  presi- 
dent by  the  Electoral  College  with  185  votes ;  Samuel  J.  Til- 
den,  the  Democratic  candidate,  received  184,  March  2. 

Rutherford  B.  Hayes  inaugurated,  March  5. 

Alexander  Graham  Bell  successfully  tested  the  telephone 
between  Boston  and  Salem,  Mass.,  March  15. 

United  States  troops  withdrawn  from  New  Orleans,  Apr.  24. 

The  great  Railroad  Strike  commenced  in  and  about  Pitts- 
burgh,  July  I. 

Moons  of  Mars  discovered  by  Asaph  Hall,  Aug.  II. 

Canal  at  Keokuk  on  the  Mississippi  completed,  Aug.  22. 

Brigham  Young  died,  aged  seventy-six,  Aug.  29. 

Bell's  improved  telephone  put  into  general  use. 

Goodyear  welt  machine  brought  out. 

Col.  A.  A.  Pope  has  the  first  bicycle  built  in  this  country. 

1878. 

Gold  quoted  at  101^  on  Wall  street,  being  lower  than  it  had 
been  since  1862,  Jan.  23. 

Bland  Silver  Bill  passed  over  President's  veto,  February. 

William  M.  Tweed  died  in  Ludlow  Street  Jail,  Apr.  12. 

The  first  train  ran  on  the  Gilbert  Elevated  Road  on  Sixth 
Avenue,  Apr.  29. 

Chin  Lan  Pin,  the  first  regularly  accredited  resident  ambas- 
sador from  the  Chinese  Empire  arrived  in  San  Francisco, 
July  25. 

The  first  train  on  the  New  York  Elevated  Road  on  the 
East  side,  Aug.  15. 

The  repeal  of  the  National  Bankruptcy  Act  became  effec- 
tive, Sept.  I. 

Subdivision  of  the  electric  current  accomplished  by  Edison, 
and  incandescent  lights  introduced,  October. 

The  Manhattan  Savings  Institution  in  New  York  burglar- 
ized to  the  extent  of  nearly  $3,000,000,  Oct.  27. 

A.  T.  Stewart's  body  stolen,  Nov.  8. 

Yellow  fever  epidemic  in  the  South.  Memphis  almost  de- 
populated. 

Wall  Street  quoted  gold  at  par,  Dec.  17. 

Knickerbocker  Ice  Company  inaugurated  long-distance 
shipments  of  ice  by  rail. 

Blake  transmitter  for  telephones  brought  out. 

1879. 

The  Government  resumed  specie  payments,  Jan.  I. 

A  National  Board  of  Health  established,  March  3. 

The  United  States  Geological  Survey  created,  March  3. 

Beef-canning  on  a  large  scale  introduced  by  the  packing 
houses. 

1880. 

Ferdinand  de  Lesseps  entertained  by  the  American  Society 
of  Civil  Engineers  at  New  York,  Feb.  26. 

The  Metropolitan  Museum  of  Art  opened  in  New  York, 
March  30. 

The  First  National  Meet  of  American  bicyclists  was  held 
at  Newport,  R.  I.,  May  31. 

The  Egyptian  obelisk  arrived  in  New  York,  July  19. 

Dr.  Henry  S.  Tanner  of  Minneapolis  ended  a  forty  days' 
fast,  Aug.  7. 

The  Tenth  Census  gave  the  population  of  the  country  as 
50,155,783. 

Germany  prohibited  the  importation  of  American  pork. 

Knickerbocker  Ice  Co.  imported  first  Norwegian  ice. 


ONE    HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


zzzi 


Edison  built  the  first  electric  road  at  Menlo  Park. 
California  State  Board  of  Viticulture  created. 
Dongola  kid  put  on  the  market. 

1881. 

Representatives  from  nineteen  governments  met  at  an  In- 
ternational Sanitary  Conference  in  Washington,  Jan.  5. 
James  A.  Garfield  inaugurated,  March  4. 
Star  Route  frauds  discovered,  March. 
The  Jtannette  Arctic  Expedition  lost  in  the  ice,  June  II. 
President  Garfield  assassinated  by  Charles  J.  Guiteau,  July  2. 
President  Garfield  died,  Sept.  19. 

Chester  A.  Arthur  succeeded  to  the  presidency,  Sept.  20. 
Cases  against  Star  Route  principals  dismissed,  Nov.  10. 
France  prohibited  the  importation  of  American  pork. 
Monroe  doctrine  emphasized  by  Secretary  Blaine. 

1882. 

Congress  increased  the  number  of  representatives  in  the 
House  to  325,  by  a  new  apportionment  based  on  the  census  of 
1880,  February. 

Fire  did  $2,250,000  damage  at  Haverhill,  Mass,  Feb.  17. 

James  G.  Elaine's  famous  eulogy  on  Garfield  delivered  in  the 
House  of  Representatives,  Feb.  27. 

Congress  passed  the  first  Chinese  Restriction  bill,  May  6. 

Guiteau  hanged,  June  30. 

Bill  passed  to  extend  the  charters  of  the  national  banks, 
July  12. 

National  Wholesale  Druggists'  Association  organized. 

Mississippi  floods  rendered  85,000  people  destitute. 

1883. 

The  National  Civil  Service  created,  Jan.  16. 

Revised  Tariff  adopted,  March  3. 

Taxes  on  capital  and  deposits  of  the  national  banks  abol- 
ished, March  30. 

Peter  Cooper  died,  aged  ninety-two,  Apr.  4. 

S.  G.  W.  Benjamin  appointed  first  minister  resident  to  Per- 
sia, May. 

Treaty  concluded  with  Corea,  May  15. 

The  Brooklyn  Bridge  opened,  May  24. 

Gen.  Brady  and  ex-Senator  Kellogg,  of  Louisiana,  finally 
acquitted  on  charges  connected  with  the  Star  Route  frauds, 
June  14. 

Last  spike  driven  in  the  Northern  Pacific  Railroad,  Sept.  8. 

Letter  postage  reduced  to  two  cents,  Oct.  I. 

Centenary  of  British  evacuation  of  New  York  celebrated. 

First  canneries  for  Alaska  salmon  established. 

Machine  for  stuffing  horse-collars  patented  by  William 
Foglesong,  of  Dayton,  O. 

1884. 

Commercial  Convention  with  Spain  signed,  Feb.  13. 
Treaty  with  Mexico  ratified,  March  I. 
Mob  riots  in  Cincinnati,  March  28-30. 
Marine  Bank  and  Grant  and  Ward  failures,  May. 
Corner  stone  of  pedestal  for  Statue  of  Liberty  laid,  Aug.  5 
Treaty  of  Reciprocity  with  San  Domingo  signed,  Dec.  4. 
The  New  Orleans  Exposition  opened,  Dec.  16. 
National  Confectioners'  Association  of  the  United  States 
organized. 
Telephone  wires  first  put  under  ground. 

1885. 

Washington  Monument  dedicated,  Feb.  22. 
Grover  Cleveland  inaugurated,  March  4. 


President  James  D.  Fish  of  the  Marine  Bank  sentenced  to 
ten  years  at  Sing  Sing,  June  27. 

Gen.  Grant  died,  aged  63,  July  23. 

Anti-Chinese  riots  in  the  Weal,  Sept.  2. 

Flood  Rock  in  the  East  River  blown  up  by  dynamite,  Oct.  10. 

Ferdinand  Ward  sentenced  to  ten  years  at  Sing  Sing,  Nor.  I. 

Fire  did  $2,500,000  damage  at  Galveston,  Texas,  Nov.  13. 

Vice-president  Thomas  A.  Hendricks  died  at  Indianapolis, 
aged  sixty-six,  Nov.  25. 

Ohio  oil  field  discovered  at  Lima. 

Long-distance  telephone  introduced  to  use. 

1886. 

Senator  Hoar's  Presidential  Succession  Bill  passed,  Jan.  19. 

Commission  appointed  to  investigate  Jacob  Sharp  and  the 
New  York  "  Boodle  Aldermen,"  Jan.  26. 

General  strike  on  the  New  York  street-railroads,  March  4. 

Boycott  by  Knights  of  Labor  begun  on  the  Gould  railroad 
system  in  the  West,  March  6. 

Anarchist  riots  and  bomb  throwing  in  Chicago,  May. 

The  great  Charleston  earthquake,  Aug.  31. 

The  Statue  of  Liberty  dedicated,  Oct.  28. 

Steamship  Oregon  was  sunk  off  the  Long  Island  coast. 

Wire  nails  first  manufactured. 

First  oil-tank  steamers  built. 

Experiments  made  with  electrical  locomotives  by  Frank  J. 
Sprague  on  the  elevated  road  in  New  York. 

1887. 

Senator  Edmund's  Retaliatory  Bill  in  the  Canadian  Fisher- 
ies dispute  passed,  Jan.  19. 

The  courts  twice  declared  boycotting  illegal,  February. 

The  Trade  Dollar  Bill  passed,  Feb.  19. 

Strike  of  the  Massachusetts  shoe  factory  operatives,  February. 

Inter-State  Commerce  Commission  created,  April  3. 

Building  trades'  strike  in  Chicago,  and  stove  molders"  strike 
in  St.  Louis,  April. 

Lehigh  Valley  coal  miners  went  out,  Aug.  30. 

First  vestibule  Pullman  train  in  service. 

Experiment  stations  established  by  the  government. 

Beet  sugar  first  successfully  produced  at  Alvarado,  California. 

1888. 

Bell  telephone  patents  confirmed  by  the  United  States  Su- 
preme Court,  March. 

Fisheries  treaty  negotiated  with  England  but  rejected  by 
the  Senate,  August. 

The  first  electric  street-railway  was  built  by  Frank  J. 
Sprague  at  Richmond. 

1889. 

Strike  on  New  York  street  railroads,  Jan.  28. 

Department  of  Agriculture  created,  with  Norman  J.  Cole- 
man  secretary,  Feb.  II. 

Benjamin  Harrison  inaugurated,  Mar.  4. 

U.  S.  men-of-war  Vandalia,  Nipsic,  and  Trenton  wrecked 
at  Apia,  Samoa,  Mar.  16. 

Centennial  of  President  Washington's  inauguration  cele- 
brated at  New  York,  Apr.  29. 

Johnstown,  Pa.,  inundated  by  bursting  of  a  reservoir,  May 
31,  3000  lives  lost. 

Seattle,  Wash.,  swept  by  a  fire  which  destroyed  $5,000,000 
worth  of  property,  June  6. 

New  York  naval  militia  created,  June  14. 

North  Dakota  admitted  to  the  Union,  Nov.  I. 

South  Dakota  admitted  to  the  Union,  Nov.  2. 


ONE   HUNDRED  YEARS   OF   AMERICAN   COMMERCE 


Montana  admitted  to  the  Union,  Nov.  8. 
Washington  admitted  to  the  Union,  Nov.  II. 
Fire  did  $4,000,000  damage  at  Lynn,  Mass.,  Nov.  26. 
Jefferson  Davis  died  at  New  Orleans,  Dec.  6. 
Tanks  for  the  making  of  window  glass  introduced  by  J. 
Chambers  at  Jeannette,  Pa. 

1890. 

The  United  States  recognized  the  Republic  of  Brazil,  Jan.  29. 

The  Lenox  Hill  and  Sixth  National  Bank,  of  New  York, 
suspended,  Jan.  30. 

The  Centennial  of  the  United  States  Supreme  Court  cele- 
brated, Feb.  4. 

President  Harrison  signed  the  World's  Fair  Bill,  Apr.  25. 

Idaho  admitted  to  the  Union,  July  3. 

Wyoming  admitted  to  the  Union,  July  n. 

William  Kemmler,  the  first  murderer  killed  by  electricity, 
was  executed  at  Auburn  Prison,  N.  Y.,  Aug.  6. 

Great  strike  on  the  New  York  Central  Railroad,  Aug.  8. 

President  Harrison  signed  the  McKinley  Tariff  Bill,  Oct.  I. 

Several  heavy  failures  occurred  in  Wall  Street,  Nov.  10. 

The  Eleventh  Census  gave  the  population  of  the  country  as 
62,662,250. 

National  Wholesale  Saddlery  Association  of  the  United 
States  organized. 

1891. 

Proclamation  of  Reciprocity  Agreement  with  Brazil,  Feb.  5- 

International  Copyright  bill  passed,  March  4. 

Italy  recalled  Baron  Fava  owing  to  troubles  over  the  New 
Orleans  race  riots,  March  31. 

The  centennial  of  the  patent  system  was  celebrated  in 
Washington  by  a  Congress  of  Inventors,  Apr.  8. 

Treaty  of  Reciprocity  with  Spain,  Apr.  20. 

The  first  railroad  passenger  train  ran  to  the  summit  of 
Pike's  Peak,  June  30. 

Commencement  of  rain-making  experiments  in  Texas, 
Aug.  10. 

First  armor-plate  supplied  to  the  government  by  the  Beth- 
lehem Iron  Company  and  Carnegie,  Phipps  &  Company. 

1892. 

Chilian  outrages  on  American  seamen,  Jan.  18. 

Constitutionality  of  the  McKinley  Tariff  affirmed  by  the 
United  States  Supreme  Court,  Feb.  29. 

The  Standard  Oil  Trust  dissolved  by  consent  of  the  share- 
holders, March  21. 

$3,000,000  cotton  fire  in  New  Orleans,  Apr.  3. 

Platinum  discovered  in  South  Dakota,  Apr.  30. 

Homestead  Steel  Works  closed,  June  30. 

Attempted  landing  of  a  Pinkerton  force  precipitated  the 
bloody  Homestead  riots,  July  6. 

Work  resumed  at  Homestead,  Aug.  3. 

Railroad  strike  at  Buffalo  called  out  the  militia,  Aug.  13. 

The  Atlantic  liner  Moravia  arrived  in  New  York  with  cholera 
on  board,  Aug.  31. 

Fire  did  $7,000,000  damage  at  Milwaukee,  Wis.,  Oct.  28. 

Discoveries  of  gold  in  Colorado,  Dec.  21. 

Long-distance  telephone  line  between  New  York  and  Chi- 
cago formally  opened. 

A  Vauclain  compound-locomotive  attained  a  speed  of  97 
miles  an  hour,  being  one  mile  in  37  seconds. 

1893. 

News  received  of  the  Hawaiian  revolution,  Jan.  28. 
Annexation  of  Hawaii  recommended  by  President  Harri- 
son, Feb.  15. 


The  President  raised  the  Stars  and  Stripes  on  the  New 
York  of  the  new  American  line,  Feb.  22. 

Grover  Cleveland  inaugurated,  March  4. 

President  Cleveland  withdrew  the  Hawaiian  treaty  from 
the  Senate,  March  9. 

Fire  did  $4,500,000  damage  in  Boston,  March  10. 

The  World's  Fair  opened  at  Chicago  by  President  Cleve- 
land, May  I. 

Locomotive  No.  999,  of  the  New  York  Central,  covered  one 
mile  in  32  seconds,  May  10. 

Chinese  Exclusion  Act  confirmed,  May  14. 

Wide-spread  distrust  breaks  out  in  a  terrible  financial  panic, 
June  20. 

$8,000,000  Clearing  House  Certificates  issued  to  give  relief, 
June  30. 

Congress  met  in  special  session,  Aug.  7. 

The  panic  had  passed,  but  confidence  was  not  restored, 
September. 

Mayor  Carter  H.  Harrison,  of  Chicago,  assassinated,  Oct.  28. 

World's  Fair  closed,  Oct.  30. 

The  Silver  Repeal  Bill  passed,  Nov.  i. 

The  last  outstanding  Clearing  House  Loan  Certificate 
retired,  Nov.  I. 

1894. 

World's  Fair  Buildings  burned  with  a  loss  of  $2,000,000, 
Jan.  8. 

Decision  of  Court  of  Appeals  allowed  foreign  corporations 
to  buy  and  sell  New  York  real  estate,  Jan.  16. 

$50,000,000  of  5  per  cent,  bonds  issued,  February ;  second 
issue  of  $50,000,000,  November. 

Coxey's  Commonweal  Army  arrived  in  Washington,  Apr.  29. 

Boycott  on  the  Pullman  Works  began  the  great  Chicago 
railroad  strike,  June  25. 

The  Hawaiian  Republic  proclaimed,  July  4. 

Chicago  railroad  strike  ended,  July  13. 

Fire  did  $3,000,000  damage  in  Chicago,  Aug.  I. 

The  United  States  recognized  the  Hawaiian  Republic, 
Aug.  9. 

The  Wilson  Tariff  Bill  passed,  Aug.  27. 

Launch  and  christening  by  Mrs.  Grover  Cleveland  of  steam- 
ship St.  Louis,  largest  vessel  built  in  America,  November  12. 


1895. 

The  Bond  Syndicate  took  an  issue  of  $62,317,500  of  gov- 
ernment "  coin  "  bonds,  February. 

The  Empire  State  Express  on  the  New  York  Central  cov- 
ered a  distance  of  436^  miles  in  407%  minutes,  Sept.  n. 

The  New  York,  New  Haven  and  Hartford  Railroad  equipped 
its  Nantasket  Beach  branch  to  operate  by  electricity. 

Steamship  St.  Paul,  the  second  great  American  liner, 
launched. 

The  Baldwin  Locomotive  Works  consummated  a  working 
agreement  with  the  Westinghouse  Electric  and  Manufacturing 
Company  for  the  production  of  electric  equipment  for  railway 
service. 

Great  activity  in  the  iron  and  steel  industries. 

Message  by  President  Cleveland  to  Congress  on  Venezuela, 
emphasizing  the  Monroe  Doctrine. 

"  Commercial  Day,"  December  19,  observed  in  New  York, 
and  by  commercial  organizations  generally  throughout  the 
country.  The  American  Commerce  Banquet  at  Delmonico's, 
New  York. 

The  New  York  "  Shipping  and  Commercial  List  and  New 
York  Price  Current "  attains  its  hundredth  year. 


ONE  HUNDRED  YEARS  OF 
AMERICAN  COMMERCE 


CHAPTER  I 


AMERICAN   BANKING 


BANKS  and  banking,  taken  of  themselves,  con- 
stitute a  chapter  of  first  importance  in  Amer- 
ican records.  To  the  national  life  the  bank- 
ing system  is  as  the  arterial  system  to  the  animal  life. 
Through  it  circulates  the  vitalizing  current  which 
sustains  the  brain  of  business  and  statecraft,  and 
strengthens  the  arm  of  labor.  It  facilitates  all  com- 
mercial transactions,  and  utilizes  all  the  resources  of 
trade,  gathering  together  the  surplus  capital  of  the 
country,  each  depositor  affording  comparatively 
little,  but  collectively  producing  a  sum  immense  in 
quantity,  which  can  be  loaned  in  portions  to  those 
who  may  need  it.  No  part  of  the  uninvested  capital 
then  remains  unused ;  what  is  not  required  by  one 
can  be  used  by  another. 

In  this  country  the  existence  of  banks  dates  from 
the  time  of  the  Revolutionary  War.  Since  then 
the  methods  pursued  to  attain  the  ends  proper  to  the 
banking  function  have  been  frequently  and  often 
radically  changed.  They  have  always  been,  however, 
more  or  less  sound,  considered  with  regard  to  their 
adaptation  to  the  times  they  served  and  the  needs 
they  had  to  supply.  In  the  history  of  their  varia- 
tions, therefore,  we  must  see  the  effect  of  changed 
conditions,  rather  than  assume  the  downfall  of  early 
error.  One  century  ago  the  fiscal  affairs  of  America 
rested  in  the  hands  of  a  great  national  bank,  the  Bank 
of  the  United  States.  The  institution  was  modeled 
almost  exactly  upon  the  plan  of  the  Bank  of  England, 
then,  as  now,  one  of  the  greatest  financial  factors  in 
the  world.  For  forty  years,  with  a  brief  lapse  of  be- 
tween four  and  five  years,  just  before  and  during  the 
War  of  1812,  this  institution  continued  to  be  the 
dominant  power  in  the  financial  affairs  of  America. 
Its  passing  away  was  marked  by  one  of  the  bitterest 
political  fights  known  to  history,  waged  by  that 
doughty  old  partisan,  Andrew  Jackson,  and  his  suc- 
cessor, Martin  Van  Buren.  The  next  quarter  of  a 
century  saw  the  so-called  State-bank  system  in  full 


control.  Many  of  these  State  banks  were,  undoubt- 
edly, as  sound  and  solvent  as  any  of  the  great  insti- 
tutions to-day.  Others,  it  is  equally  true  to  say,  were 
not.  The  condition  of  affairs  which  resulted  from 
their  operation,  as  a  whole,  however,  can  scarcely 
be  said  to  have  been  of  the  best.  With  no  uniform 
basis  for  their  government,  the  prosperity  of  the  time 
had  constantly  to  struggle  under  the  disadvantage  of 
a  demoralized  currency,  discounted  in  direct  propor- 
tion to  the  number  of  miles  it  traveled  from  home. 

The  Civil  War,  with  its  terrible  demands  upon  the 
country,  found  this  system  unable  to  respond  as  fully 
as  was  needed,  and  a  new  system,  the  one  under 
which  we  have  remained  until  to-day,  was  devised. 
It  avoids  the  centralization  of  power  in  any  one  great 
chartered  institution,  and  distributes  it  at  large  among 
the  banks  of  the  country.  It  places  the  pledge  of  our 
government  behind  every  bank-note  issued  in  the 
United  States.  Around  this  national  system  has 
grown  up  the  financial  world  of  to-day.  Among 
these  facilities  are  banks  of  discount  and  deposit, 
which  furnish  their  conveniences  to  the  mercantile 
world;  great  private  houses,  with  branches  reaching 
to  every  other  country,  and  furnishing  a  medium  of 
foreign  exchange  which  renders  possible  the  extended 
commercial  enterprises  which  now  characterize  Amer- 
ica; and  savings  institutions,  trust  companies,  and 
financial  engines  without  number,  all  furnishing  the 
power  to  drive  the  great  business  machines  of  to-day. 

The  beginning  of  American  banking  is  so  indis- 
solubly  linked  with  the  name  and  fame  of  Alexander 
Hamilton,  first  Secretary  of  the  Treasury  of  the  United 
States,  that  many  have  forgotten  the  fact  that  Robert 
Morris,  the  Philadelphia  merchant,  was  the  first  great 
American  banker.  He  it  was  who,  in  company  with 
George  Clymer  and  a  few  other  gentlemen,  taking  as 
their  sole  security  bills  drawn  in  desperation  by  the 
Continental  Congress  on  John  Jay,  then  in  Spain  ne- 
gotiating a  loan,  established  on  their  own  personal 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


credit  in  1780  the  Pennsylvania  Bank,  in  Carpenters' 
Hall,  Philadelphia.  This  was  the  first  bank  es- 
tablished in  the  United  States.  Its  only  object  was 
to  aid,  with  all  its  resources,  the  government  in 
transporting  and  maintaining  the  army,  then  in  the 
most  desperate  need.  This  patriotic  end  it  accom- 
plished, and  to  its  aid,  given  at  a  most  critical  time 
in  the  national  history,  it  is  scarcely  possible  to  as- 
cribe too  great  an  importance. 

Robert  Morris  having  been  appointed  Superin- 
tendent of  Finance,  the  Bank  of  Pennsylvania  went 
out  of  existence  in  the  following  year,  and  Congress, 
acting  by  Mr.  Morris's  advice,  granted  in  December 
to  him  and  his  associates  a  charter  for  the  Bank  of 
N  orth  America,  and  in  January,  1781,  the  new  bank  be- 
gan business  in  Philadelphia.  Thomas  Willing  was  its 
first  president,  and  there  were  twelve  directors.  While 
this  bank  was,  like  its  predecessor,  designed  to  give 
aid  to  the  government,  then  in  those  desperate  finan- 
cial straits  which  marked  the  closing  years  of  the 
war,  it  was  also  intended  to  furnish  its  facilities  to  in- 
dividuals and  to  carry  on  a  general  banking  business. 
Its  capital  was  $400,000,  and  it  was  conducted  on  a 
specie  basis,  its  notes  being  declared  legal  tender.  It 
also  secured  a  charter  from  the  State  of  Pennsylva- 
nia, and  as  it  was  the  only  bank  in  the  country  at  that 
time,  it  soon  began  to  roll  up  large  profits.  The  years 
1783  and  1 7  84  saw  this  prosperous  institution  declar- 
ing dividends  of  14  per  cent.  Such  success  imme- 
diately produced  emulators,  and  a  corporation  was 
formed  to  start  a  rival  bank.  Before  its  charter  had 
been  secured,  however,  its  leading  projectors  were 
pacified  by  being  allowed  to  obtain  large  blocks  of 
a  new  issue  of  $500,000  worth  of  stock.  This  pre- 
served its  field  undivided,  and  its  prosperity  contin- 
ued. In  1 787  it  was  rechartered  by  the  Pennsylvania 
legislature  as  a  State  bank,  and  with  renewals  from 
time  to  time,  has  since  continued. 

New  York,  having  seen  the  success  of  the  Bank  of 
Pennsylvania,  and  her  merchants,  appreciating  the 
facilities  afforded  by  such  an  institution,  began  agitat- 
ing the  question  of  the  establishment  of  a  bank  in  their 
city.  A  number  of  prominent  men  assembled,  and  a 
plan  was  proposed  which  was  at  once  called  by  its 
opponents  the  "  land  "  bank.  It  provided  for  paying 
in  but  a  small  proportion  of  the  capital  in  specie,  the 
balance  to  be  secured  by  land  accepted  at  two  thirds 
of  its  appraised  value,  and  against  which  notes,  pay- 
able in  specie,  could  be  issued  for  one  third  of  its 
value.  Of  this  plan  Chancellor  Livingston  was  the 
great  supporter,  and  his  influence  had  nearly  carried 
it  through  the  legislature  when  it  applied  to  be 
chartered.  Its  adversaries,  prominent  among  whom 


was  Alexander  Hamilton,  managed  to  defeat  its 
passage,  however,  and  it  was  never  revived.  Much 
more  serious  was  the  experience  of  a  modified  form 
of  "  land "  bank  which  convulsed  the  colony  of 
Massachusetts  a  number  of  years  before,  and  was 
finally  established  after  the  deposition  of  an  opposing 
governor.  In  a  short  time,  however,  the  British 
government  dissolved  it,  and  placed  some  severe  re- 
strictions upon  banks  in  that  particular  colony. 

The  demand  for  a  bank  continued  to  be  made 
by  the  New  York  merchants,  and  on  February  23, 
1784,  a  call  was  issued  for  a  meeting  which  was 
held  at  the  Merchants'  Coffee  House  and  General 
Alexander  MacDougal  occupied  the  chair.  It  was 
then  decided  to  start  a  bank  with  a  capital  of 
$500,000,  either  gold  or  silver,  divided  into  1000 
shares.  On  March  isth,  500  shares  having  been 
taken,  the  stockholders  organized  by  the  election  of 
General  MacDougal  as  president,  and  Samuel  Frank- 
lin, Robert  Bowne,  Comfort  Sands,  Alexander  Ham- 
ilton, Joshua  Waddington,  Thomas  Randall,  William 
Maxwell,  Nicholas  Low,  Daniel  McCormick,  Isaac 
Roosevelt,  John  Vanderbilt,  and  Thomas  B.  Stough- 
ton,  as  directors.  William  Seton  was  elected  cash- 
ier, and  so  unused  were  New  York  business  men  of 
that  day  to  banks  and  banking  methods  that  Cash- 
ier Seton  was  immediately  sent  to  Philadelphia, 
with  letters  of  introduction  to  the  Bank  of  North 
America,  to  learn  how  such  affairs  were  properly 
conducted.  The  stockholders,  in  the  interim,  urged 
on  by  the  hopes  of  large  profits,  hastened  all  their 
arrangements,  and  as  a  charter  had  not  been  se- 
cured from  the  legislature,  the  bank  started  without 
one,  opening  its  doors  June  9,  1784. 

This  bank,  known  as  the  Bank  of  New  York,  had 
for  its  original  location  the  old  mansion  of  William 
Walton,  at  No.  67  St.  George's  (now  Franklin) 
Square.  Three  stories  high,  and  built  of  the  old 
yellow  Holland  brick  with  hewn  stone  lintels,  this 
ancient  house,  erected  in  1752,  remained  standing 
until  1 88 1. 

But  even  at  this  early  day,  it  appears,  there  were 
many  people  who  believed  that  banks  were  antago- 
nistic to  the  interests  of  the  community,  and  in  1785 
and  1786,  currency  becoming  scarce,  a  cry  went  up 
that  these  institutions  were  hoarding  specie,  and  in 
some  States,  notably  New  York,  where  the  feeling  was 
greatest,  issues  of  paper  money  were  put  out  by  the 
legislatures.  Financial  affairs  were  in  this  condition, 
general  confidence  being  shaken,  when,  the  Con- 
stitution having  been  adopted  and  General  George 
Washington  elected  to  the  presidency,  Alexander 
Hamilton,  the  first  Secretary  of  the  Treasury,  came 


ONE   HUNDRED   YEARS  OF   AMERICAN   COMMERCE 


forward  with  his  famous  financial  policy.  The  na- 
tion assumed  and  bonded  the  debt  incurred  by  the 
Continental  Congress  and  the  various  colonies  in 
carrying  on  the  war,  and,  going  further,  established 
in  1791  the  Bank  of  the  United  States.  This  bank, 
which  was  chartered  by  Congress  for  twenty  years, 
was  established  to  act  as  the  fiscal  agent  of  the 
government  and  to  be  the  depository  for  the  public 
moneys.  It  was  also  authorized  to  issue  its  notes, 
payable  in  specie,  and  was  made  in  every  way  possi- 
ble the  agent  of  the  United  States  Treasury  and  the 
great  power  in  the  financial  affairs  of  the  country. 
Its  capital  was  placed  at  $10,000,000,  divided  into 
25,000  shares  of  $400  each,  payable  one  fourth  in 
specie  and  three  fourths  in  6  per  cent,  stocks  of  the 
United  States.  It  was  allowed  to  hold  property  of 
all  kinds  up  to  the  value  of  $15,000,000,  inclusive 
of  its  capital  stock,  and  further  to  establish  branch 
banks  in  the  various  cities.  In  accordance  with 
this  last  provision  it  at  once  opened  in  New  York  a 
branch  known  as  an  office  of  discount  and  deposit. 
The  prosperity  of  the  Bank  of  the  United  States  be- 
gan at  once,  and  during  its  whole  career  it  averaged 
annual  dividends  of  8  and  10  per  cent. 

The  influence  of  Hamilton's  policy  was  immedi- 
ately felt,  and  prosperity  speedily  returned.  The 
spirit  of  speculation  was  let  loose  in  the  land  and 
a  stringency  resulted  in  the  currency  that  seemed 
likely  to  have  serious  consequences,  and  was  only 
averted  by  Alexander  Hamilton  and  the  United 
States  Treasury  coming  three  times  to  the  relief  of 
the  straitened  business  community.  After  this  little 
set-back,  which  was  of  short  duration,  business  con- 
tinued steadily  to  improve.  In  New  York,  where 
political  influence  had  prevented  the  granting  of 
charters  for  new  banks,  a  corporation  known  as  the 
Manhattan  Company,  and  headed  by  Aaron  Burr, 
succeeded  in  1799  in  getting  a  charter,  ostensibly  to 
provide  New  York  with  pure  water.  The  capital 
of  the  company  was  placed  at  $2,000,000,  and,  un- 
noticed by  the  politicians  in  power,  the  charter  con- 
tained a  clause  which,  after  reciting  that  the  capital 
was  to  be  devoted  to  establishing  a  water-supply, 
declared  that  the  surplus  should  be  "  employed  in 
the  purchase  of  public  or  other  stocks  or  any  other 
moneyed  transactions  or  operations  not  inconsistent 
with  the  laws  and  constitution  of  the  State  of  New 
York."  It  is  needless  to  say  that  with  such  a  clause 
in  its  charter  $500,000  was  quickly  found,  and  the 
money,  after  fulfilling  the  object  for  which  the  char- 
ter was  granted,  was  devoted  to  the  establishment  of 
a  new  bank.  In  1803  no  less  than  forty  banks  were 
open  and  doing  business  throughout  the  country. 


The  expiration  in  1811  of  the  charter  of  the  Bank 
of  the  United  States,  which  had  failed  of  renewal, 
followed  by  the  war  declared  in  1812  against  Eng- 
land, placed  the  country  in  a  most  unsatisfactory 
position.  Having  little  or  no  credit,  it  found  itself 
forced  to  fall  back  in  great  measure  on  the  banks. 
These  were  all  institutions  under  State  charters,  no 
less  than  123  new  ones  having  been  created  in  the 
four  years  following  the  dosing  of  the  United  States 
Bank.  These  had  an  aggregate  capital  of  $40,000,- 
ooo  and  emitted  notes  to  the  face  value  of  $200,- 
000,000,  a  large  portion  of  which,  in  the  Middle 
States  especially,  were  issued  as  loans  to  the  gov- 
ernment. 

As  might,  perhaps,  have  been  expected  in  view  of 
the  prostration  of  the  public  credit,  the  strain  upon 
the  banks  speedily  became  too  great,  and  Septem- 
ber i,  1814,  specie  payment  was  suspended.  It 
was  during  this  period  that  the  private  banker  first 
assumed  the  importance  in  the  commercial  world 
that  he  has  to-day.  Stephen  Girard,  the  great 
Philadelphia  merchant,  purchased  in  1811  the  build- 
ing and  stock  of  the  late  Bank  of  the  United  States, 
and  then  began  carrying  on  a  banking  business  him- 
self, with  a  capital  of  $1,200,000,  which  he  shortly 
increased  to  $4,000,000.  While  private  bankers 
had,  of  course,  existed,  there  had  been  none  in 
America  on  such  a  grand  scale,  and  it  marks  the 
beginning  of  the  era  of  great  houses  whose  names 
are  associated  with  money  the  world  over.  Girard's 
patriotism  was,  too,  quite  equal  to  his  sagacity,  and 
in  the  closing  years  of  the  war,  after  the  Treasury  had 
vainly  tried  to  float  a  loan  of  $5,000,000,  but  had 
only  been  able  to  secure  a  total  subscription  of  $20,- 
ooo,  Girard  took  the  whole  amount.  The  assist- 
ance thus  furnished  undoubtedly  had  its  effect  in 
bringing  about  the  successful  peace.  This  was  ac- 
complished in  December,  1814,  and  one  of  the  acts 
of  Congress  soon  after  was  to  grant  a  new  charter 
for  twenty  years  to  the  Bank  of  the  United  States. 
This  institution  accordingly  resumed  business  in 
January,  1817,  and  speedily  became  one  of  the 
greatest  financial  institutions  in  the  world.  Its  capi- 
tal was  fixed  at  $35,000,000,  divided  into  350,000 
shares.  Of  this,  $7,000,000  was  held  by  the  United 
States.  Of  the  remainder  a  great  amount,  as  much  as 
84,000  shares  at  one  time,  was  held  in  foreign  coun- 
tries, and  the  stock  was  quoted  at  50  per  cent,  above 
par.  This  bank  issued  notes,  none  being  less  than 
five  dollars,  payable  in  specie  on  demand,  and  did 
a  general  banking  business,  discounting  notes  and 
making  advances  on  bullion  at  the  rate  of  6  per 
cent. 


ONE   HUNDRED  YEARS  OF   AMERICAN   COMMERCE 


Its  government  was  entrusted  to  twenty-five  di- 
rectors, five  of  whom,  being  holders  of  stock,  were 
appointed  by  the  President  of  the  United  States. 
From  these  directors  was  chosen  a  board  of  seven 
which,  headed  by  the  president,  had  active  control 
of  all  its  operations.  It  rapidly  established  branch 
offices  in  all  the  cities  of  any  importance,  and  in 
1830  there  were  twenty-seven  of  these  branch  banks 
in  existence  and  doing  a  thriving  business. 

One  of  the  first  effects  of  the  rechartering  of  the 
Bank  of  the  United  States  was  to  force  the  large  num- 
ber of  State  banks  either  to  resume  specie  payments 
or  to  wind  up  their  affairs.  Many  were  forced  to  the 
latter  alternative,  and  of  the  446  State  banks  then  ex- 
isting, there  were  165,  including  those  ruined  by  the 
war,  which  went  out  of  business.  From  the  aggre- 
gate State  banking  capital  of  $90,000,000,  in  the 
whole  country,  these  suspensions  withdrew  $30,000,- 
ooo.  Of  this  amount,  $5,000,000  was  an  actual 
loss  and  was  distributed  between  the  government 
and  individual  holders.  For  some  time  after  this 
the  State  banks  can  scarcely  be  said  to  have  in- 
creased, although  they  continued  in  existence  and 
legislative  provision  for  them  and  their  government 
was  made  in  many  of  the  States. 

In  New  York  a  general  banking  law,  known  as 
the  Safety  Fund  Act,  was  passed  in  April,  1829. 
Under  it  banks  were  allowed  to  issue  circulating 
notes  up  to  twice  the  amount  of  their  capital,  and 
their  loans  were  limited  to  two  and  a  half  times  their 
capital.  A  guarantee  fund  was  created  by  the  an- 
nual payment  of  one  half  of  one  per  cent,  on  the 
capital  stock  to  the  State  Treasurer.  This  payment 
was  only  to  continue  until  three  per  cent,  had  been 
paid,  and  the  fund  thus  created  was  to  go  to  mak- 
ing good  the  payment  of  the  circulation  and  other 
debts  of  any  such  banks  as  might  become  insolvent. 
Other  States  had  different  regulations,  not  all  of 
them  as  wise  as  New  York,  perhaps,  but  each  one 
establishing  certain  precautions. 

Coincident  almost  with  the  rechartering  of  the 
United  States  Bank  was  the  introduction  of  banks 
for  savings.  These  institutions  are  a  branch  of  bank- 
ing that,  while  deserving  an  extended  mention,  must 
fall,  under  the  lines  of  this  article,  within  a  brief 
space.  Benevolent  in  conception  and  designed  to 
afford  the  poor  an  opportunity  to  save  in  small 
amounts,  their  plan  is  simply  one  of  deposit,  on 
which  the  bank,  as  borrower,  pays  to  the  depositors 
a  fair  rate  of  interest,  and  with  the  advantage  of  a 
large  capital,  the  aggregate  of  many  small  deposits, 
makes  advantageous  investments  unattainable  to 
small  capitals  such  as  the  individual  depositor  could 


control.  They  differ  from  regular  banks  because 
of  their  philanthropic  purposes,  in  being  exempt 
from  taxation,  and  in  not  loaning  or  investing  their 
funds  on  personal  security. 

The  first  American  savings  bank  was  opened  in 
Philadelphia  in  1816  and  was  called  the  Philadel- 
phia Savings  Fund  Society.  The  same  year  one 
was  established  in  Boston,  New  York  following  in 
1819,  and  in  1820  there  were  ten  in  the  country, 
having  8635  depositors  and  $1,138,570  in  deposits. 
They  have  increased  with  the  country,  and  in  1 890 
there  were  921  with  4,258,893  depositors,  and  hav- 
ing placed  to  their  credit  the  enormous  sum  of 
$1,524,844,500. 

For  many  years  the  Bank  of  the  United  States 
continued  to  grow  more  and  more  powerful.  Its 
resources  increased,  its  business  extended,  and  it  be- 
came a  factor  in  the  industrial  and  commercial  life 
of  the  nation,  such  as  had  not  been  dreamed  possi- 
ble. On  the  first  of  November,  1832,  it  was  accord- 
ing to  its  own  showing  one  of  the  richest  institutions 
in  the  world.  Its  total  liabilities,  including  the 
notes  it  had  in  circulation,  its  deposits,  and  the  debts 
owing  to  holders  of  public  funds,  were  $37,296,- 
950.20;  while  its  assets,  including  specie,  cash  in 
Europe,  and  debts  from  industrial  and  banking 
companies,  were  $79,593,870.97.  This  left  the 
enormous  surplus  of  $42,296,920.77.  It  seemed  as 
stable  as  any  institution  of  its  kind  in  the  world,  not 
excepting  the  famous  Bank  of  England,  and  it 
afforded  a  currency  for  general  circulation  that  was 
freely  accepted  everywhere.  But  the  great  power 
of  the  Bank  of  the  United  States  had  made  it  ene- 
mies, and  a  demand  arose,  upon  General  Jackson's 
election  to  the  presidency,  that  it  should  not  be  re- 
chartered.  The  officers  were  chiefly  of  the  party 
opposed  to  him.  Immediately  upon  entering  office 
the  President  announced  that  he  would  refuse  to 
sign  any  bill  extending  the  life  of  the  Bank  of  the 
United  States.  He  declared  that  it  was  dangerous 
to  the  liberties  of  the  United  States,  and  that  it  was 
unconstitutional.  Shortly  after  this,  the  public  funds 
were  withdrawn  from  the  bank.  So  great  had  been 
the  prosperity  of  the  country  during  the  twenty 
years  this  bank  had  operated,  however,  that  the  war 
debt  of  the  nation  had  been  completely  paid  and  a 
surplus  of  $40,000,000  remained.  This  surplus, 
upon  its  withdrawal  from  the  Bank  of  the  United 
States,  Congress  voted  to  distribute  among  the  States. 
The  blow  dealt  to  the  great  bank  by  this  withdrawal 
was  a  terrible  one,  and  with  the  loss  of  its  charter 
impending  and  the  unrelenting  enmity  of  the  Admin- 
istration, it  was  thought  it  must  close.  Nicholas 


LEVJ  P.  MORTON. 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


Biddle,  its  president,  determined  not  to  give  up, 
however,  and  on  February  18, 1836,  he  stole  a  march 
on  President  Jackson  by  having  it  incorporated  by 
the  State  legislature  as  the  Pennsylvania  Bank  of 
the  United  States.  In  this  form,  as  a  State  bank,  it 
continued  to  exist,  but  it  never  assumed  the  impor- 
tance it  had  had  before.  It  finally  closed  in  1840. 

All  this,  however,  took  years  to  work  itself  out, 
and  in  the  meantime  much  was  happening  in  the 
financial  world.  The  demise  of  the  Bank  of  the 
United  States  as  a  national  institution  left  the  field  to 
the  banks  chartered  by  the  States.  These  at  once 
made  the  most  of  their  opportunity ;  and  helped,  as 
they  were,  by  receiving  on  deposit  large  sums  of  the 
distributed  public  moneys,  they  increased  rapidly, 
and  1837  saw  634  of  them  in  the  country,  having  an 
aggregate  capital  of  $291,000,000.  With  the  great 
prosperity  which,  in  the  shape  of  State  bank-notes, 
came  over  the  country  with  these  financial  changes, 
arose  also  a  spirit  of  the  wildest  speculation.  Public 
lands  were  the  chosen  field  of  the  operators,  and  the 
dealing  ran  into  millions.  It  was  all  based,  though, 
on  the  current  notes,  many  of  these  being  issued  by 
"  wildcat "  banks,  and  worthless.  Trouble  seemed 
certain,  and  President  Jackson,  in  trying  to  establish 
our  finances  on  a  sound  basis,  issued  his  famous  Spe- 
cie Circular,  ordering  all  agents  to  accept  nothing  but 
specie  in  payment  for  the  public  lands.  This  pre- 
cipitated the  crash.  The  banks  were  called  upon  at 
once  to  redeem  all  their  circulation  in  specie,  and 
after  vainly  attempting  to  do  so,  they  suspended  pay- 
ment on  May  9,  1837.  Six  months  later,  no  relief 
having  come,  a  meeting  of  136  delegates  from  banks 
all  over  the  country  was  held  in  New  York  to  con- 
sider whether  means  could  be  devised  for  resumption, 
but  no  relief  at  that  time  was  found  possible. 

It  was  during  this  unlucky  year  that,  at  President 
Van  Buren's  suggestion,  the  sub-treasury  plan  as  it 
now  exists  was  brought  forward  as  a  measure  to  pre- 
vent the  loss  of  the  public  moneys  by  the  failure  of 
banks.  It  was  defeated  at  this  time,  but  three  years 
later  passed,  only  to  be  repealed  in  the  succeeding 
year.  Five  years  afterward,  however,  it  was  finally 
reenacted. 

In  May,  1838,  the  New  York  banks  resumed  pay- 
ment. They  were  followed  in  August  by  the  Phila- 
delphia and  Southern  banks,  but  these  only  held  out 
for  a  little  over  a  year,  and  on  September  9,  1839, 
suspended  again.  Despite  all  the  trouble  in  which 
the  banks  were  involved,  they  increased  almost  as 
rapidly  as  before.  In  1840  their  number  had  swelled 
to  901,  with  a  total  capital  of  $358,000,000.  The 
system  of  State  banks,  nevertheless,  had  grown  un- 


popular, and  the  suspensions  of  1837  and  1839  and 
the  continuing  uncertainty  and  lack  of  confidence 
caused  a  strong  demand  for  a  return  to  the  old  na- 
tional banking  system.  At  this  time  the  presidential 
campaign  in  which  General  Harrison  was  elected 
came  on.  One  of  the  great  issues  on  which  this  cam- 
paign was  fought  and  won  was  that  a  new  national 
bank  should  be  established  at  once,  and  immediately 
upon  his  inauguration  General  Harrison  called  a  spe- 
cial session  of  Congress  to  consider  the  matter.  But  he 
was  destined  never  to  carry  out  the  wishes  of  his  party, 
for  he  died  before  Congress  had  convened,  and  his 
successor,  President  Tyler,  twice  vetoed  the  measure 
when  it  was  passed  and  presented  to  him, — as  a  bill 
to  establish  a  "  Financial  Agent  of  the  Government" 
"to  act  for  it  in  all  fiscal  matters,  and  to  facilitate 
mercantile  exchanges  throughout  the  country."  This 
action  on  the  part  of  the  President  settled  the  ques- 
tion of  banks  acting  under  the  authority  of  the  United 
States  for  many  years  thereafter,  and  until  1864  all 
banks  of  issue  and  deposit  were  operated  under  char- 
ters obtained  in  their  various  States.  The  effects  of 
the  lack  of  uniformity  in  the  system  were  soon  visible, 
not  only  in  the  stringency  from  1840  to  1843, ar>d tne 
later  suspension  of  1857,  but  in  the  generally  demor- 
alized currency,  which,  with  the  exception  of  specie, 
had  its  standard  of  par  only  in  its  own  neighborhood, 
and  could  be  passed  at  any  considerable  distance 
only  at  a  great  discount.  The  farther  away  it  went 
from  the  bank  of  issue  the  less  it  was  worth.  The 
State  banks  continued  to  put  forth  as  many  notes  as 
they  could  pass.  Many  of  these  banks  were  perfectly 
solvent  institutions,  and  were  wisely  conducted  upon 
a  sound  basis;  but  truth  compels  the  statement  that 
many  others  were  not,  while  at  the  root  of  the  whole 
system  was  the  lack  of  an  essential  uniformity.  Bank 
failures  were  very  common.  It  is  worthy  of  mention 
here  that  throughout  all  the  vexations  and  inconve- 
niences caused  by  the  State  banks  in  their  day,  New 
England  was  little  affected.  What  was  known  as  the 
Suffolk  Bank  System  was  there  in  use;  by  this  the 
Suffolk  Bank  of  Boston  redeemed  and  collected  for 
all  New  England  banks,  each  of  which  had  a  stipu- 
lated deposit,  the  whole  aggregating  $300,000,  with 
the  Suffolk  Bank  for  this  purpose. 

The  stringency  of  1840-43  having  been  safely 
tided  over  by  the  banks,  better  times  appeared,  and 
a  still  further  impetus  was  given  to  our  national  pros- 
perity in  1849  by  the  discovery  of  gold  in  California, 
developing  great  activity  both  industrially  and  com- 
mercially. In  the  next  four  or  five  years  the  one 
event  which  stands  out  conspicuously  in  American 
banking  was  the  establishment  on  October  n,  1853, 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


of  the  New  York  Clearing  House  Association.  This 
association,  of  the  utmost  importance  in  expediting 
and  giving  security  to  the  great  banking  interests  of 
the  country,  began  with  a  membership  of  fifty-two 
banks.  Its  system,  so  simple  and  yet  so  effective 
that  it  seems  almost  impossible  its  origination  and  es- 
tablishment could  have  been  so  long  delayed,  is  that 
by  which  each  bank,  instead  of  presenting  separately 
to  the  other  banks  for  payment  such  of  their  checks 
as  it  holds  and  in  its  turn  paying  cash  to  all  the  other 
banks  for  such  of  its  own  checks  as  they  hold,  sends 
them  all  at  a  certain  hour  to  the  Clearing  House. 
Here  all  the  checks  are  assorted,  a  clerk  being  pres- 
ent from  each  bank  having  a  membership;  andthesum 
total  of  the  checks  each  bank  presents,  compared  with 
the  sum  total  of  the  checks  presented  against  it,  gives 
a  balance  for  which  the  Clearing  House  draws  its 
check,  and  transactions  that  would  have  taken  many 
clerks  and  messengers  a  whole  day  to  complete, 
are  finished  in  an  hour  or  a  little  more.  In  addition 
to  the  convenience  of  this  system,  its  beneficial  effect 
in  economizing  currency  is  immense.  When  it  is  re- 
membered that  the  great  banking  interests  which 
center  in  New  York  have  transactions  daily  involv- 
ing exchangesof  from  $100,000,000  to  $200,000,000, 
it  will  be  readily  understood  what  a  vast  loss  such  an 
amount  of  idle  money  would  entail  under  the  old 
system  of  separate  clearance  payments.  The  Clear- 
ing House,  with  its  system  of  balances,  is  able  to 
settle  it  all  by  the  use  of  from  3  j£  to  4  per  cent,  of 
the  total  currency  amount  involved. 

In  addition  to  these  advantages,  the  Clearing 
House  is  an  assurance  of  protection  for  its  mem- 
bers, and  in  its  more  extended  operations  of  issuing 
loan  certificates  at  critical  times  has  been  a  bulwark 
of  safety  to  the  banking  interests  of  the  whole  coun- 
try. By  its  help,  at  the  outbreak  of  the  Civil  War, 
the  New  York  banks  were  enabled  to  come  instantly 
to  the  assistance  of  the  government  with  large 
sums,  which  they  could  scarcely  have  commanded 
otherwise;  and  later,  in  the  panics  of  1873  and  1893, 
the  issuance  of  $25,000,000  in  loan  certificates  on 
the  first  occasion,  and  nearly  $50,000,000  on  the 
second,  again  did  much  toward  enabling  the  banks 
to  withstand  the  terrible  pressure  of  those  times. 
Between  these  years  the  average  daily  exchanges 
of  the  Clearing  House  were  $105,964,277  and  the 
average  daily  balances  $3,939,265.  At  present 
sixty-six  banks  are  members  of  the  Clearing  House 
Association.  Besides  these,  eighty-one  other  banks 
and  trust  companies  which  are  not  members  are 
cleared  here  through  the  banks  which  belong  to  the 
association.  A  sixty-seventh  member  of  the  Clear- 


ing House  Association  is  the  Assistant  Treasurer  of 
the  United  States,  at  the  sub-treasury  in  New  York. 
Almost  90  per  cent,  of  the  government  expendi- 
tures being  made  in  New  York  by  check,  the  mem- 
bership of  the  Assistant  Treasurer  greatly  facilitates 
clearance. 

The  advantages  of  the  clearing-house  system  were 
immediately  recognized  when  the  New  York  asso- 
ciation started,  and  Boston,  Philadelphia,  Chicago, 
St.  Louis,  and  other  cities  soon  adopted  it. 

Returning  to  1853,  the  banking  interests  of  the 
country  continued  much  in  the  same  condition,  but 
trouble  was  already  brewing  from  over-speculation, 
and  in  1857  the  great  financial  and  industrial  de- 
pression, which  was  fortunately  as  short  as  it  was 
sharp,  struck  the  country.  The  great  storm  broke 
on  August  24th  of  that  year,  when  the  Ohio  Life  and 
Trust  Company  suspended  with  liabilities  of  $7,- 
000,000.  It  was  a  terrible  failure,  and  on  September 
25th  and  2  6th  the  Philadelphia  banks  were  forced 
to  suspend ;  a  general  suspension  in  Virginia,  Mary- 
land, Rhode  Island,  and  the  District  of  Columbia 
soon  following.  The  trouble  increased  in  New 
York,  and  a  run  on  the  banks  threatening  serious 
consequences,  the  legislature  on  October  i4th  au- 
thorized a  suspension  of  specie  payments  for  one 
year.  The  banks  accordingly  closed,  but  on  Decem- 
ber 24th,  after  only  two  months,  the  city  banks  re- 
sumed. The  Massachusetts  banks  also  suspended, 
and  the  panic  became  general  in  New  England, 
factories  being  shut  down,  banks  closed,  and  troops 
held  in  readiness  to  suppress  anticipated  riots  among 
the  great  crowds  who  were  thrown  out  of  work.  For- 
tunately the  trouble  did  not  last  long,  but  while  it 
existed  there  were  5123  failures,  with  total  liabilities 
of  $291,750,000. 

The  resumption  of  banks  and  renewal  of  business 
was  general  early  in  the  succeeding  year,  and  that 
the  banks  of  the  country  suffered  as  little  as  any  of 
the  great  interests  affected  is  shown  by  the  fact  that 
in  1860,  one  year  prior  to  the  long  suspension  of 
specie  payments  caused  by  the  war,  there  were  in 
the  country  1562  banks,  with  an  aggregate  capital 
of  $422,000,000  and  a  circulation  of  about  $207,- 
000,000.  They  held  in  specie  at  the  time  $83,594,- 
537,  and  were  credited  with  deposits  of  $254,000,000. 

During  the  next  four  years  the  part  played  by  the 
banks  was  loyal  and  patriotic,  but  the  history  of 
that  time  with  its  government  issues  of  "  legal  ten- 
ders" comes  more  properly  within  the  domain  of 
national  finance.  The  national  banking  law,  which 
regulates  the  banks  to-day,  was  passed  June  3, 1864. 
Its  provisions  are  simple  and  eminently  secure,  and 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


in  their  operation  have  proved  most  satisfactory. 
They  require  a  company  of  five  persons  or  more 
and  a  fully  paid-up  capital.  As  a  security  for  their 
notes  of  issue  they  are  obliged  to  hold  the  govern- 
ment's pledge  in  the  form  of  United  States  bonds, 
on  which  they  are  allowed  circulation  by  the  Comp- 
troller of  the  Currency  up  to  90  per  cent  of  their 
par  value.  Shortly  after  this  law  was  passed,  Con- 
gress placed  a  prohibitive  tax  of  10  per  cent,  on  the 
circulating  notes  of  the  State  banks,  so  that  for  the 
first  time  since  1836  the  currency  of  the  country  re- 
turned to  the  original  basis  of  the  national  credit, 
where  it  has  since  remained. 

The  national  banking  law  had  no  sooner  passed 
than  many  of  the  old  State  banks  began  changing 
to  the  new  system.  While  the  war  lasted  the  num- 
ber of  the  national  banks  was  about  500.  Those 
that  remained  under  the  old  State  charters  contin- 
ued to  do,  as  they  are  doing  to-day,  a  general  bank- 
ing business  of  discount,  loan,  and  deposit,  but  the 
circulation  of  their  notes  became  impossible  owing 
to  the  tax.  When  the  national  banks  were  first  or- 
ganized Congress  had  provided  that  the  total  cir- 
culation to  be  allotted  them  by  the  Comptroller  of 
the  Currency  should  not  exceed  $300,000,000.  So 
rapid  was  their  increase,  however,  that  four  years 
later  the  full  amount  of  these  notes  had  been  issued, 
and  there  were  1629  national  banks  with  a  paid-in 
capital  of  $426,189,111.  Of  these  banks  Massa- 
chusetts had  207;  New  York,  299;  Pennsylvania, 
197;  and  Ohio,  133.  Two  years  later,  inconven- 
ience being  experienced  because  the  limit  of  circu- 
lation had  been  reached,  Congress  authorized  an 
extra  issue  of  $54,000,000,  which  was  almost  imme- 
diately taken  up. 

The  following  year  (1873)  saw  the  disastrous  ordeal 
of  panic  and  distress  through  which  it  was  inevitable 
the  nation  should  pass  on  its  return  from  the  infla- 
tion caused  by  the  great  war  loans  to  the  sound  and 
normal  basis  of  peaceful  prosperity.  It  was  passed 
without  wreck,  although  commercial  and  financial 
interests  suffered  heavily.  In  1875  Congress  re- 
moved all  restrictions  upon  the  total  amount  of 
notes  the  national  banks  might  issue.  It  also  voted 
the  resumption  of  specie  payment,  which  had  been 
suspended  since  1861,  and  decreed  that  it  should 
take  place  January  i,  1879.  This  resumption,  it 
may  be  said,  to  the  undying  credit  of  the  American 
nation,  was  accomplished  without  the  slightest  dis- 
turbance of  business.  Since  then,  the  number  of  na- 
tional banks  in  the  country  has  increased  steadily 
each  year.  With  2047  banks,  having  an  aggregate 
capital  of  $497,864,833  and  a  total  surplus  of  $134,- 


123,649  in  1875,  the  next  ten  years  showed,  in  1885, 
the  existence  of  2665,  with  capital  amounting  to 
$524,599>6°2  and  a  surplus  of  $146,903495,  mak- 
ing an  increase  of  618  banks  and  a  gain  of  $26,734,- 
769  capital  and  $12,779,846  surplus.  Still  growing 
and  prosperous,  the  country  continued  to  call  for  the 
further  extension  of  the  banks  with  their  facilities  and 
assistance,  and  in  1892  their  number  had  become 
3701,  having  an  aggregate  capital  of  $679,076,650 
and  a  surplus  of  $237,761,865.  These  banks  in 
their  average  daily  deposits  took  over  $300,000,000, 
which  shows  the  enormous  part  they  play  in  the 
business  world.  Of  this,  about  90  per  cent,  is  in  the 
form  of  the  almost  universal  check. 

In  this  year  (1892)  came  upon  the  country  the 
beginning  of  the  depression  of  business  and  financial 
stringency  that  is  now  so  happily  showing  signs  of 
abatement.  It  came  more  gradually  than  such 
crises  usually  come  and  has  been  more  persistent 
Without  actual  panic  the  country  verged  perilously 
near  to  disaster.  The  money-broker,  who  had  almost 
disappeared  since  the  days  of  the  war,  reappeared 
and  secured  premium  for  currency  of  any  sort.  The 
banks  had  very  little  money  of  any  kind,  and  for  a 
time  payments  were  almost  wholly  in  certified  checks. 
This  showed  that  the  trouble  was  not  really  organic, 
and  vast  sums  of  idle  money,  hoarded  and  withdrawn 
from  circulation,  further  attested  that  the  country 
was  not  impoverished.  But  confidence  was  lacking, 
and  it  operated  as  a  check  on  enterprise  which,  re- 
acting industrially  as  it  always  does,  reached  all 
classes  and  caused  much  suffering.  It  also  gave 
rise  to  the  great  danger  of  a  run  being  commenced 
on  the  savings-banks.  In  the  West,  indeed,  this  did 
happen;  and  many  perfectly  solvent  institutions  were 
forced  to  the  wall,  being  unable  to  realize  quickly 
enough  on  their  securities  to  meet  demands.  In 
New  York,  when  the  trouble  became  threatening, 
and  a  rush  of  eager,  excited  depositors  was  to  be 
expected  at  almost  any  moment,  the  savings-bank 
officials  met,  and  taking  advantage  of  the  law,  de- 
clined to  pay  any  accounts  without  three  months' 
notice.  This  saved  the  banks,  but  it  was  the  nearest 
approach  to  suspension  that  had  been  known  since 

i873- 

The  causes  of  the  trouble  have  been  matter  for 
much  discussion  and  difference  of  opinion  during 
the  past  two  years ;  and  a  belief  that  its  roots  lay  in 
certain  fallacies  of  national  finance  has  caused  action 
by  Congress,  which  has  undoubtedly  been  beneficial 
in  its  effect.  Still,  it  is  questionable  whether  the  true 
seat  of  the  difficulty  has  been,  or  will  be,  reached  by 
any  of  these  measures  or  plans  of  alleviation.  An 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


overreaching  speculation,  which  had  locked  up  re- 
sources that  should  have  been  available,  coupled 
with  great  uncertainty  and  some  apprehension,  per- 
haps owing  to  political  events  and  the  commercial 
and  industrial  changes  they  might  be  expected  to 
bring  with  them,  had  much  to  do  with  it.  To-day, 
it  is  pleasant  to  believe  we  have  passed  beyond  it. 

In  this  brief  resume  of  a  century  of  banking  in 
America,  the  vastness  of  the  present  interests  has 
been  already  foreshadowed.  How  enormous  these 
interests  are  and  of  how  general  usefulness,  words 
alone  can  convey  no  adequate  idea.  In  figures  only 
can  expression  be  found  for  the  financial  magnitudes 
that  make  up  the  American  banking  interests  of  to- 
day. From  the  $400,000  capital  represented  by 
Robert  Morris's  bank  in  Philadelphia  a  little  over 
100  years  ago,  the  aggregate  capital  of  the  banks 
of  the  United  States  is  now,  according  to  the 
latest  available  statistics,  the  tremendous  sum  of 
$1,069,826,555,  while  one  person  in  every  seven  or 
eight  in  the  whole  country  patronizes  the  banks  as 
a  depositor  and  thus  gains  the  privilege  of  their  con- 
veniences and  economy.  Against  the  above  aggre- 
gate of  capital  the  banks  hold  aggregate  resources 
amounting  to  $7,342,397,052,  and  of  the  12,000 
banks  in  existence,  exclusive  of  loan  and  trust  com- 
panies, in  the  year  ending  July,  1894,  only  seventy- 
nine  failures  occurred.  The  solvency  of  the  system 
is  well  evidenced  in  this,  and  safeguarded  as  the 
banks  are  by  Federal  and  State  legislation,  with  reg- 
ular examinations  by  experts  and  sworn  reports  from 
officials,  it  is  fair  to  say  that  no  community  enjoys 
greater  security  for  its  funds  of  deposit  or  exchange. 

The  very  foundation  of  the  American  system  for  the 
past  thirty  years  has  been  the  national  bank,  which 
has  opened  its  doors  in  nearly  every  town  and  hamlet 
of  the  country  where  the  common  business  of  life  is 
transacted.  It  is  a  well- organized,  carefully  super- 
vised, uniform  system,  which  renders  its  benefits  to 
the  individual  directly  and  indirectly,  as  well  as  in 
the  revenue  it  affords  the  government.  The  latest 
statistics  give  the  number  of  national  banks  in  the 
country,  October  31,  1894,  as  3756,  in  which  there 
were  287,842  shareholders.  Their  aggregate  capital 
was  $672,671,365,  and  their  total  surplus  and  un- 
divided profits  $334,121,082.  Of  these  banks  and 
their  capital,  Pennsylvania  led  with  406  within  her 
borders,  but  her  capitalization  was  but  $74,168,390, 
or  less  than  that  of  New  York  with  334  banks  and 
$87.346,o6o  capital,  or  than  Massachusetts  with  267 
banks  and  $97,992,500.  In  the  importance  of  its 
national  banks  Ohio  ranks  fourth,  with  246  institu- 
tions having  a  capital  of  $45,240,100. 


The  total  resources  of  the  national  banks  on 
October  2,  1894,  were  $3,473,922,055,  and  on  Oc- 
tober 3151  of  the  same  year  they  had  a  total  cir- 
culation of  $207,472,603  outstanding,  as  security  for 
which  there  were  United  States  bonds  on  deposit  to 
the  value  of  $199,706,200,  and  $28,071,239  lawful 
money  reserved  on  deposit  to  redeem  circulation. 
Their  total  loans  and  discounts  were  $2,007,122,- 
191.  In  individual  deposits  the  national  banks 
held  on  July  18,  1894,  $1,647,017,129,  and  the 
number  of  depositors  was  given  as  1,929,340. 

Under  the  latest  statement  of  the  condition  of  the 
national  banks,  based  on  Comptroller  Eckels's  call 
of  July  nth  last,  the  figures  show  the  aggregate  of 
resources  and  liabilities  to  have  been  $3,410,002,- 
591  each.  The  whole  number  of  national  banks 
was  3715. 

As  the  national  banks  do  not  usually  pay  interest 
on  current  balances,  the  fact  that  they  are  utilized  as 
banks  of  deposit  to  such  a  great  extent  shows  the 
appreciation  in  which  the  facilities  afforded  by  them 
for  the  transaction  of  business  are  held  by  the  public 
at  large.  Since  the  national  banking  system  started, 
upward  of  thirty  years  ago,  the  aid  rendered  through 
it  to  the  business  world  in  carrying  on  its  undertak- 
ings has  come  to  be  fully  recognized.  The  ruinous 
rates  of  exchange  prevailing  under  the  old  State- 
bank  system,  prior  to  the  war,  are  happily  forgotten. 
A  check  or  draft  can  be  bought  from  a  bank 
in  New  Orleans  or  San  Francisco,  drawn  on  its 
New  York  correspondent,  which  will  cost  but  the 
smallest  fraction  of  i  per  cent.,  or  nothing  at  all,  ac- 
cording to  the  time  of  year  and  the  direction  in 
which  money  is  moving.  For  this  same  exchange 
in  1859  the  average  rate  was  from  i  to  \y2  per 
cent.,  a  tax  upon  the  extension  of  business  that 
could  not  be  borne  in  the  present  era  of  close 
competition  and  narrow  margins.  Again,  on  the 
total  issue  of  about  $200,000,000  of  State  bank- 
notes in  circulation  prior  to  1 860,  a  loss  of  from  i  per 
cent,  to  10  per  cent,  was  entailed  upon  the  holders 
in  any  but  the  most  restricted  local  transactions. 
The  advantage  of  replacing  this  circulation  of  dis- 
count by  a  bank-note  of  uniform  appearance,  with 
value  fixed  by  law  and  ordered  receivable  at  par 
by  every  other  bank  in  the  system,  was  speedily 
apparent.  Furthermore,  behind  this  uniformity  lies 
as  security  the  quickest  asset  known,  in  the  shape  of 
the  United  States  bond  fully  covering  the  circula- 
tion. Lawful  money  reserves  further  provide  for  the 
redemption  of  circulating  notes  by  these  banks,  and 
a  further  reserve  of  deposit  funds  is  ordered  not 
alone  to  secure  depositors,  but  to  still  further  hedge 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


about  the  reserves  from  possible  impairment.  In 
all  these  ways,  as  well  as  by  the  reductions  achieved 
in  rates  of  interest  on  loans  and  discounts,  through 
making  available  a  largely  increased  capital,  together 
with  lessened  charges  for  collection  made  possible 
by  thorough  organization,  the  people  have  directly 
felt  the  benefits  of  improved  banking  methods.  The 
immense  aggregate  saving  that  is  accomplished  an- 
nually along  these  lines  can  be  gathered  from  the 
fact  that  the  clearing  houses  of  the  United  States  in 
the  single  year  of  1894  had  clearings  amounting  to 
over  $45,000,000,000.  With  such  great  sums  as 
these,  the  smallest  fractional  charge  possible  becomes 
heavy  in  the  aggregate  of  transactions. 

Of  the  relation  of  the  national  banks  to  the  gov- 
ernment there  is  but  little  dispute,  and  practically 
but  one  opinion  —  that  it  is  mutually  beneficial. 
Until  March  3,  1883,  both  capital  and  deposits  of 
the  national  banks  were  taxed,  and  a  further  tax  of 
i  per  cent,  on  their  circulation  has  been  continued 
from  the  first.  From  these  three  items  of  taxation, 
the  first  two  discontinued  since  1883,  an  aggregate 
amount  of  $144,660,952  had  been  yielded  up  to 
July  1 8,  1894.  In  addition  to  this  a  conservative 
estimate  allows  two  fifths  per  cent,  of  revenue  to 
government  on  the  national  bank-note  circulation, 
through  failures  to  redeem,  which  forces  the  banks 
to  make  the  full  amount  good  before  taking  down 
their  deposit  of  United  States  bonds  against  which 
the  notes  were  issued. 

As  government  depositories  the  national  banks 
further  perform  without  charge  duties  that  annually 
save  the  government  a  great  deal  of  money.  Since 
their  inauguration  the  national  banks  have  received 
and  stored  in  their  vaults,  at  various  times,  $3,- 
500,000,000,  a  service  of  great  value.  As  a  gov- 
ernor of  the  national  currency,  operating  to  keep  it 
within  controllable  bounds,  the  national  banks  have 
also  been  of  the  greatest  assistance  through  the  fa- 
cilities they  afford  for  the  issue  of  instruments  of 
credit.  The  depositors  in  the  national  banks  in 
1894  outnumbered  by  492,702  those  in  all  the 
State  and  private  banks  and  loan  and  trust  compa- 
nies combined.  As  these,  together  with  the  national 
banks,  are  utilized  for  checking  against  balances  on 
deposit  rather  than  on  those  in  banks  for  savings,  it 
is  readily  seen  that  the  check  is  more  largely  em- 
ployed at  the  national  banks  than  at  the  other  insti- 
tutions, and  inasmuch  as  at  least  53  per  cent,  of 
even  the  retail,  and  consequently  more  largely  cash, 
business  of  the  country  is  transacted  through  the 
medium  of  these  small  pieces  of  paper,  while  from 
90  to  92  per  cent,  of  the  total  business  is  thus 


transacted,  the  important  part  they  play  will  be  like- 
wise readily  understood.  The  circulating  medium 
which,  in  a  relative  sense,  these  instruments  of 
credit  supply,  is  perhaps  a  relief  that  should  coun- 
terbalance the  complaint  sometimes  made  regarding 
the  non-elasticity  of  issue  under  the  present  national 
banking  system.  The  average  annual  circulation 
of  the  national  banks  between  1864  and  1894  was 
$282,801,252,  and  the  security  of  the  notes  is  ab- 
solute. A  fluctuating  market  for  bonds,  against 
which  only  a  percentage  of  issue  is  allowed,  has 
undoubtedly  made  the  lines  of  issue  a  little  rigid, 
but  whether  more  so  than  is  consistent  with  proper 
precautions  against  possible  manipulation  or  infla- 
tion is  a  matter  of  extreme  doubt.  In  fact,  so  far 
as  the  system  goes,  it  is  the  most  perfect  yet  de- 
vised, and  in  its  operation  has  united  uniformity 
and  stability  with  great  facility  of  adaptation  to 
the  constantly  arising  needs  of  the  commercial  and 
financial  interests. 

On  the  national  banks  as  a  foundation,  then,  rests 
the  great  superstructure  of  State,  private,  and  sav- 
ings-bank institutions,  which,  together  with  the 
building  and  loan  associations  and  the  loan  and 
trust  companies,  constitute  the  remainder  of  the 
money-managing  world  of  this  country.  Of  the 
State  banks  there  were  in  the  United  States  5033  on 
July  i,  1894,  with  an  aggregate  capital  of  $244,- 
435,573  and  resources  amounting  to  $1,077,164,- 
813.  These  banks  held  a  surplus  of  $74,412,319. 
The  aggregate  deposits  were  $658,107,494,  and  the 
loans  and  discounts  $665,988,823.  Of  United 
States  bonds  these  banks  held  but  $604,055,  as 
against  $10,662,200  held  as  investment  by  the  na- 
tional banks  in  addition  to  those  deposited  as  secur- 
ity. The  business  is  profitable,  but  in  the  average 
rather  less  so  than  that  of  the  national  banks.  In 
all  the  respects  of  general  banking  the  State  banks 
transact  the  same  kinds  of  business  as  the  national 
institutions,  with  the  exception  of  the  issuance  of 
circulating  notes  and  the  performance  of  those 
functions  of  a  governmental  nature  entailed  by  a 
Federal  charter. 

The  savings-banks  in  existence  in  July,  1894,  were 
1024  in  number  and  in  two  classes,  the  mutual  and 
the  stock.  The  latter  class,  of  which  there  were 
378,  is  of  comparatively  slight  importance,  not  more 
than  15  per  cent,  of  the  total  figures  of  this  branch 
of  banking  being  accredited  to  it.  The  capital 
stock  of  the  savings-banks  of  the  country  is  about 
$30,000,000,  and  their  total  resources  are  $1,980,- 
744,189.  The  total  amount  of  the  deposits  of  indi- 
vidual savings  is  $1,747,961,280,  while  about  $30,. 


10 


ONE   HUNDRED  YEARS   OF  AMERICAN   COMMERCE 


000,000  more  is  held  subject  to  check.  The  loans 
of  these  banks  amount  to  $1,026,622,425,  of  which 
but  a  very  small  percentage  relatively  is  secured  on 
other  than  real  or  intrinsic  values. 

The  private  banks,  while  neither  so  numerous  nor 
so  heavily  capitalized  as  the  branches  just  men- 
tioned, are  a  most  potent  factor  in  the  commercial 
world,  by  their  especial  prominence  in  the  field  of 
foreign  exchange.  Their  number  in  1894  was  904, 
and  their  total  capital  $26,652,167,  with  resources 
of  $105,379,051.  Their  surplus  was  placed  at  $6,- 
005,126.  The  total  of  the  loans  and  discounts  was 
$66,596,017,  being  $521,468  in  excess  of  deposits. 

The  224  loan  and  trust  companies  have  a  total 
capitalization  of  $97,068,092  and  a  surplus  of  $57,- 
663,599.  Their  total  resources  are  $705,186,944,  of 
which  loans  and  discounts  are  $374,421,713.  With 
the  exception  of  the  national  and  savings-banks, 
these  companies  are  the  heaviest  holders  of  United 
States  bonds  among  the  banks,  $13,449,411  being 
accredited  to  them. 

These  five  branches  constitute,  properly  speaking, 
the  American  banks.  The  building  and  loan  as- 
sociations are  a  species  of  cooperative  banking,  sav- 
ings, and  loan  business,  and,  since  they  started  in 
1840,  have  grown  rapidly.  The  statistics  of  1894 
gave  5838  of  them  in  operation  in  the  United 
States.  These  wonderfully  fast-spreading  institu- 
tions, deriving  their  capital  from  dues  assessed  on 
their  members  and  loaning  it  again  to  those  giving 
real  security,  had  in  1894  the  enormous  sum  of 
$470,142,524  loaned  on  real  estate  alone.  As 
nearly  all  the  loans  are  small  in  amount,  being 
simply  enough  to  build  a  home  for  some  compara- 
tively poor  person,  the  extent  of  this  cooperative 
undertaking  is  readily  seen.  In  addition  to  these 
loans  on  real  estate,  the  associations  have  combined 
resources  sufficient  to  bring  the  total  to  $528,852,- 
885,  against  which  the  heaviest  items  are  $370,003,- 
478  for  dues  paid  in,  and  $35,775,366  on  paid-up 
stock. 

Under  these  various  heads,  then,  the  banking  in- 
terests of  America  have  grouped  themselves  in  the 
closing  years  of  the  nineteenth  century.  Beneath 


them  all  are  the  broad,  strong  shoulders  of  the  United 
States  government,  bearing  the  final  responsibility. 
In  the  magnitude  of  the  interests  now  represented  in 
the  bank,  all  branches  of  industry  and  commercial 
activity  have  at  last  come  to  see  their  share.  In  the 
statistics  of  the  annual  report  is  told  each  year  the 
story  of  what  America  has  achieved.  In  the  exten- 
sion of  the  bank  to  the  remoter  districts  are  carried 
the  same  improvements  to  the  every-day  business 
conditions  of  the  community  that  the  waterworks 
brings  to  the  sanitary  conditions,  or  the  public  school 
to  the  educational  conditions.  The  bank  is  the  agent 
of  civilization  in  its  advance,  whether  in  new  coun- 
tries or  new  fields  of  human  endeavor.  In  the  city  it 
is  the  great  driving  engine  furnishing  the  power  for 
the  machinery  of  affairs.  The  few  brief  figures  of  the 
dry  and  business-like  report,  giving  the  resources  of 
the  banks  of  the  United  States  at  $7,342,397,052, 
tell  most  eloquently  the  commercial  and  industrial 
achievements  of  the  American  people.  To  this  suc- 
cess the  banking  interests  have  contributed  in  no 
scanty  measure,  and  in  it  they,  in  common  with  all 
the  people,  share  to-day. 

One  very  prominent  feature  in  the  history  of  bank- 
ing has  been  the  part  played  by  private  banks.  It 
has  been  seen  that  Stephen  Girard  was  very  import- 
ant in  the  history  of  Philadelphia  banking;  and  later, 
Prime,  Ward  &  King,  bankers  in  New  York,  were 
enabled  to  perform  eminent  services  for  their  country 
by  loans  negotiated  in  England.  It  was  not,  how- 
ever, till  about  the  time  that  the  supply  of  gold  from 
California  raised  the  prices  of  commodities  all  over 
the  globe,  that  many  important  American  houses  in 
banking  circles  became  prominent.  Every  great  city 
now  has  its  private  banks  and  bankers,  who  exercise 
an  important  part  in  the  economy  and  distribution  of 
wealth.  They  are  able  to  handle  business  without 
making  it  known  to  the  whole  world;  they  can  af- 
ford instant  aid,  without  appeal  to  a  board  of  direc- 
tors, and  everywhere  they  have  proved  of  value. 
Such  names  as  those  of  the  Drexels,  the  Morgans, 
the  Peabodys,  and  the  Browns,  will  instantly  occur 
to  every  one  as  household  words  in  the  realm  of 
finance. 


CHAPTER   II 

AMERICAN   LABOR 


A  CORDING  to  the  census  of  1890,  the  total 
number  of  people  engaged  in  gainful  oc- 
cupations of  all  kinds  was  22,735,661,  of 
which  number  18,820,950  were  males  and  3,914,711 
females.  These  figures  include  all  engaged  in  any 
gainful  occupation,  whether  wage-earners  or  wage- 
payers,  whether  employers  or  employees,  and  whether 
engaged  in  manual  or  professional  service.  Elimi- 
nating the  wage-earners  from  this  vast  number,  it 
is  found  that  they  constituted  15,099,901,  of  which 
number  11,802,540  were  males  and  3,297,361  were 
females.  If  we  classify  this  large  number  of  wage- 
earners,  we  find  that  3,639,437  were  engaged  in 
agriculture,  fisheries,  and  mining;  4,153,385  in  do- 
mestic and  personal  service;  2,364,661  in  trade  and 
transportation,  and  4,942,418  in  manufacturing  and 
mechanical  industries.  These  statements  are  general, 
and  that  more  specific  information  may  be  at  hand 
the  table  on  the  next  page  has  been  made,  giving 
the  number  of  males  and  females  and  the  total 
employed  in  specific  occupations  where  more  than 
50,000  were  engaged. 

It  would  be  exceedingly  interesting  if  the  growth 
of  this  great  body  of  working-people,  numbering 
over  15,000,000  at  the  present  time,  and  the  in- 
fluences which  have  brought  it  into  existence,  could 
be  traced  step  by  step  during  all  the  past  100  years. 
It  is  impossible  to  give  statistical  statements  of  the 
number  of  persons  employed  in  any  industry,  or 
otherwise,  until  the  census  of  1850,  so  we  cannot 
ascertain  what  the  strength  of  the  body  of  working- 
people  was  in  1795.  A  fair  calculation,  based  on 
relative  statistics  at  different  periods,  would  indicate 
that  it  was  less  than  500,000.  Calculations  in  this 
respect  are  not  satisfactory,  however,  because  labor 
at  the  beginning  of  the  loo-year  period  of  which  we 
are  treating  was  engaged  in  domestic  manufactures, 
of  which  no  general  account  exists. 

Four  fifths  of  the  population  of  the  United  States 


at  the  close  of  the  Revolutionary  War  was,  according 
to  Mr.  Bancroft,  the  historian,  of  English  descent. 
He  states  that  in  1775  the  colonies  were  inhabited 
by  persons  one  fifth  of  whom  had  for  their  mother 
tongue  some  other  language  than  the  English.  At 
the  present  time  careful  consideration  would  indi- 
cate that  only  about  one  half  of  our  population  can 
claim  the  English  as  their  mother  tongue ;  and  yet, 
during  the  first  quarter  of  the  present  century,  im- 
migration could  not  have  affected  the  nationality  of 
our  working-people  to  any  great  extent,  the  accepted 
estimate  of  the  total  number  of  immigrants  between 
1790  and  1819  being  placed  at  250,000.  Prior  to 
this  year  (1819)  no  account  was  taken  of  the  num- 
ber of  immigrants  settling  in  the  country,  but  since 
that  year  the  Federal  government  has  taken  account 
of  immigration.  In  no  year  between  1820  and  1824, 
inclusive,  did  the  number  arriving  in  this  country 
reach  10,000.  In  1833  the  largest  number  in  the 
first  third  of  the  present  century  arrived,  when 
58,640  immigrants  were  registered.  In  only  two 
years,  1835  and  1838,  has  the  number  been  less 
than  that  just  given,  but  with  these  two  exceptions, 
the  annual  immigration  has  been  progressive,  al- 
though varying  in  volume.  Great  impetus  was 
given  in  the  forties,  the  movement  being  accelerated 
by  the  famine  in  Ireland  in  1846  and  1847,  and  by 
political  causes  in  Germany.  The  total  immigra- 
tion since  the  Revolutionary  War  and  up  to  July 
31,  1895,  was  17,731,678,  while  the  foreign-bom 
residing  in  this  country  at  the  census  of  1890  was 
9,249,547,  being  14.77  Per  cent,  of  the  whole 
population. 

These  large  additions  to  our  population  must 
have  had  a  marked  influence  upon  our  industrial 
conditions.  In  1880  30.63  per  cent,  of  all  persons 
engaged  in  manufacturing  and  mechanical  indus- 
tries were  foreign-bom,  while  in  1890  31.56  per 
cent,  of  those  so  engaged  were  bom  abroad.  In 


12 


ONE   HUNDRED   YEARS   OF  AMERICAN    COMMERCE 


1880  12.52  per  cent,  of  the  foreign-bom  were  en- 
gaged in  agriculture.  It  is  seen,  therefore,  that  the 
manufacturing  and  mechanical  industries  have  ab- 
sorbed a  much  larger  proportion  of  the  new  ele- 
ment than  has  agriculture.  The  tendency  of  our 
immigrants  is  to  assimilate  with  our  mechanical  in- 
dustries. This,  of  course,  increases  the  supply  of 
labor  in  comparison  to  the  demand,  and  may  have 
at  times  lowered  wages  and  crippled  the  consuming 
power  of  the  whole  body  of  the  population.  I  am 
satisfied  that  this  has  not  been  serious,  and  it  may 
have  been  imperceptible,  for  at  the  time  of  the  ac- 
celerated movement  of  immigration  there  was  a  vast 
development  of  the  railroad  interests  of  the  country, 
which  development  could  not  have  been  carried  on 
so  extensively  and  completely  as  it  was  without  a 
large  body  of  common  laborers.  Immigration  sup- 
plied this  labor,  but  it  soon  began  to  find  its  way 
into  organized  industry.  As  the  tendency  of  wages 
has  been  constantly  upward  since  the  close  of  the 
last  century,  it  cannot  be  argued  that  the  assimila- 
tion of  immigrants  with  our  own  native  labor  has 
reduced  wages,  but  it  can  be  assumed — without  the 


possibility  of  proof,  however — that  such  assimilation 
may  have  retarded  their  increase  beyond  what  was 
experienced. 

During  the  past  few  years  the  industrial  depres- 
sion has  checked  immigration,  but  with  renewed 
prosperity  the  movement  may  assume  its  normal 
proportions.  The  character  of  immigration  has 
changed,  and  this  change  has  not  been  for  the  bet- 
ter. If  immigration  could  be  left  entirely  to  natural 
motives  it  is  quite  evident  that  the  movement  would 
be  retarded  gradually,  but  it  is  stimulated  by  trans- 
portation companies,  in  their  desire  to  secure  busi- 
ness, to  such  an  extent  that  a  large  body  of  objec- 
tionable immigrants  has  been  brought  to  the  country 
during  the  past  ten  years.  When  it  is  known  that  an 
immigrant  can  be  transported  from  Italy  to  Chicago 
for  less  money  than  a  first-class  passenger  can  travel 
from  New  York  to  Chicago  it  is  not  strange  that 
people  flock  to  the  United  States ;  and  during  this 
past  decade  it  is  quite  certain  that  labor  in  America 
has  suffered  through  this  class  of  immigration,  espe- 
cially in  mining  districts,  where  wages  have  been 
kept  down  and  much  distress  has  prevailed  through 


NUMBER  OF  MALE   AND  FEMALE  WAGE-EARNERS  REPORTED  FOR  OCCUPATIONS   IN  WHICH 

50,000  OR  OVER  WERE  EMPLOYED  IN   1890 


OCCUPATIONS. 

MALES. 

FEMALES. 

TOTAL. 

OCCUPATIONS. 

MALES. 

FEMALES 

TOTAL. 

Agriculture,  Fisheries,  and  Min- 
ing: 
Agricultural  laborers  . 

2.556,930 
59,8»7 
6^,829 
208,330 
140,906 

70,047 

82,i<;i 
55,66o 

I39,7i8 
6,008 
1,858,504 
31,816 
6,688 
237,523 

74,35° 

169,704 
131,602 
492,852 

368,265 
54,005 

79,459 

48,446 
55,875 
205,931 

381-312 

447,085 

•a 

219 

'33 

687 

2,825 
147 

86,8^2 

54,8i3 
216,627 
51,402 
1,205,876 

283 

4,875 
27,772 
64,048 

237 

24 

4 

2,909 

o   29 
58449 

M38 

3,004,015 
60,150 

65,857 
208,549 
141,039 

70,734 

84,976 
55,807 

139,765 
92,810 

1,913.317 
248^43 
58,090 

'  -443,399 
74,633 

'74,579 
'59,374 
556,900 

368,502 
54,029 

79463 

S',355 
55,904 
264,380 

382,750 

Telegraph  and  telephone  oper 
ators  .    .  . 

43,740 

57,908 

205,256 

179,838 

60,007 

105,313 
611,226 
80,144 
828 
142,087 

"76,937 
61,006 
158,874 

5«,S6l 
52,745 
406 
66,241 

218,622 

56,555 

80,889 
133,216 
3,988 
121,586 
54,427 

83,601 

63,529 
47.6^6 

8474 

2,273 
59 

33>6o9 

194 
129 
191 

92,9«4 
288,155 

2449 
139 
63 
42 

41,850 

60,058 
47 

1,246 
42 

5,565 
3°2 
145,716 
63,611 
947 

27,821 
3,696 

•j6.i7C 

52,214 

60,181 
205,315 

213.447 

60,201 
105,442 
611,417 
173,058 

144,53° 
177,076 
61,069 
158,916 

93,4" 
52,844 
60,464 
66,288 

219,868 

56,597 

86,454 
'33,5>8 
149,704 

185,197 
55-374 

111,422 

67,225 
8,1.071 

Manufacturing  and   Mechan 
tea  I  Industries: 

Fishermen  and  oystermen.  .  .  . 
Lumbermen  and  raftsmen  
Miners  (coal)  

Miners  (not  otherwise  noted)  . 
Stock-raisers,     herders     and 
drovers  

Blacksmiths.  .  . 

Boot  and  shoe  makers  and  re- 

Domestic  and  Personal  Service: 
Barbers  and  hair-dressers  
Bartenders.. 

Brick  and  tile  makers  and  terra- 
cotta workers   .  .    . 

Butchers  

Engineers   and    firemen    (not 
locomotive). 

Carpenters  and  joiners  

Cotton-mill  operatives  

Housekeepers  and  stewards  .  . 
Laborers  (not  specified)  
Launderers  and  laundresses.  . 
Nurses  and  midwives.  .  . 

Dressmakers  

Iron  and  steel  workers 

Machinists  

Marble  and  stone  cutters  
Masons  (brick  and  stone)  
Mill    and    factory    operatives 
(not    specified)  

Servants  

Watchmen,  policemen,  and  de- 
tectives   

Trade  and  Transportation  : 
Agents    (claim,     commission, 
real  estate,  insurance,  etc.) 
and  collectors  

Millers  (flour  and  grist)  
Milliners  

Molders  

Painters,    glaziers,   and    var- 

Bookkeepers  and  accountants. 
Clerks  and  copyists  
Draymen,  hackmen,  teamsters, 
etc  ... 

Plumbers  and  gas  and  steam 
fitters.  .  . 

Printers,    lithographers,    and 

Hostlers  
Locomotive  engineers  and  fire- 
men. 

Sawand  planingmill  employees 
Seamstresses  

Messengers  and   errand  and 
office  boys.  .  .  . 

Tailors  and  tailoresses  . 

Tinners  and  tinware-makers. 
Tobacco    and    cigar     factory 

Sailors  .... 

Salesmen  and  saleswomen. 
Steam-railroad  employees  (not 

Wood-workers  (not  otherwise 
specified)  

Woolen-mill  operatives 

CARROLL  D.  WRIGHT. 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


13 


the  influx  of  very  cheap  foreign  labor.  It  may  be 
said,  with  almost  entire  truthfulness,  that  the  mining 
industry  is  the  one  that  has  chiefly  suffered  in 
various  directions  through  foreign  immigration. 

In  1795  the  labor  of  the  country  was,  as  already 
stated,  of  a  domestic  character.  Working-people 
were  engaged  in  agricultural  pursuits,  the  fisheries, 
and  in  the  clearing  of  the  forests,  while  a  small  per- 
centage were  engaged  in  what  is  known  as  domestic 
manufacture  and  in  commerce.  The  factory  system, 
dating  from  1790  as  the  year  of  its  birth,  did  not 
become  influential,  so  far  as  labor  was  concerned, 
until  after  1820.  With  the  complete  establishment 
of  textile  factories,  which  occurred  in  1813  at  Wal- 
tham,  Mass.,  which  town  has  the  honor  of  erecting 
the  first  complete  factory  in  the  world  for  the  manu- 
facture of  finished  cloth,  in  all  the  various  processes, 
from  the  raw  material,  labor  began  to  find  new  ave- 
nues of  employment,  and  the  young  women  of  the 
rural  districts  were  induced  to  enter  factories  as 
spinners  and  weavers.  The  growth  of  the  textile 
factory  was  rapid  after  1820,  both  in  the  New  Eng- 
land and  the  Middle  States.  Fair  wages  and  easy 
work  attracted  the  women  of  our  own  country  and 
English  girls,  and  until  Irish  immigration  com- 
menced in  earnest  our  textile  factories  were  sup- 
plied with  English  and  American  girls  mostly,  but 
since  their  day  there  have  been  various  changes. 
The  American  and  the  English  girl  stepped  out  of 
the  factories  and  up  into  higher  callings,  and  the 
Irish  operative  stepped  in.  The  Irish  operative  has 
during  the  last  twenty  years  or  more,  however,  been 
giving  way  gradually  to  the  French-Canadian  and 
representatives  of  other  nationalities.  Practically 
during  the  last  fifty  years  there  have  been  three 
changes  in  nationalities  in  the  operatives  of  our 
textile  works.  With  the  adaptation  of  steam  and 
water-power  in  the  textile  industry  other  industries 
grew.  Of  course,  all  manufacturing  received  a  great 
impetus  during  the  Revolutionary  War,  when  our 
people  were  obliged  to  furnish  their  own  supplies. 
During  the  war  the  manufacturers  extended  their 
enterprises  and  built  mills  —  which  are  sometimes 
called  factories  —  but  they  were  simple  in  their  con- 
struction. At  the  close  of  the  war  all  these  efforts 
either  ceased  or  the  production  of  the  mills  was 
greatly  reduced. 

The  American  nation  found  itself  independent 
politically  of  Great  Britain,  but  still  a  subject  of  it  in 
respect  to  all  its  manufacturing  interests.  The  Eng- 
lish government  sought  to  prevent  the  planting  of 
the  factory  system  here,  but  through  the  ingenuity 
and  perseverance  of  Samuel  Slater,  who  had  served 


his  apprenticeship  in  the  construction  and  manage- 
ment of  factory  machinery  in  England,  the  system 
was  established  in  the  United  States;  and  then,  as  a 
result  of  the  earlier  legislation  after  the  adoption  of 
the  Federal  constitution,  manufactures  were  stimu- 
lated and  the  era  of  industrial  progress  in  this  coun- 
try was  opened.  It  can  be  said  that  the  century 
from  1795  to  the  present  year  has  been  one  of  con- 
stant progress  in  the  labor  world,  the  factory  sys- 
tem gradually  taking  over  to  itself  industry  after 
industry,  until  nearly  everything  is  now  produced 
under  it.  The  old  domestic  or  hand  system  has 
passed  away  almost  entirely,  and  the  re'gime  of 
invention  and  machinery  holds  full  sway.  These 
great  industrial  changes  have  practically  wrought  a 
revolution  in  this  and  other  countries,  bringing  con- 
stant employment  to  our  working-people,  and  result- 
ing in  a  tendency  all  through  the  century  to  the 
increase  of  wages  and  a  decrease  in  the  cost  of 
production. 

Along  with  this  change  in  the  method  of  produc- 
tion, mining  has  been  developed  to  an  enormous 
degree,  until  now  the  United  States  produces  as 
much  iron  as  the  mother  country.  The  development 
of  iron-mining  and  the  manufacture  of  iron  have 
brought  into  employment  a  vast  body  of  skilled 
workmen,  and  the  ramifications  of  the  industry  still 
greater  forces.  Our  large  towns  and  cities  are,  as  a 
rule,  thoroughly  equipped  with  sewers,  and  the 
manufacture  of  pipes  and  mains  for  this  purpose,  as 
well  as  the  manufacture  of  gas-pipes  and  mains  and 
plumbing  work  generally,  has  been  the  result.  These 
latter  changes  have  occurred  within  the  last  fifty 
years. 

The  change  in  the  system  of  work  has  practically 
done  away  with  apprenticeships.  Manual  training 
and  the  work  of  trade  schools  are  fitting  boys  and 
young  men  for  skilled  work  in  a  better  way  than  did 
the  apprenticeship  system,  which  was  the  universal 
rule  at  the  beginning  of  our  century.  With  the  es- 
tablishment of  the  factory  system  apprenticeships 
were  less  obligatory.  By  1850  the  resort  to  them  was 
waning,  while  since  the  vast  development  of  the  fac- 
tory system,  especially  subsequent  to  the  Civil  War, 
they  have  been  still  less  prevalent.  Another  great 
change  which  has  come  in  the  way  of  industry  is  the 
employment  of  women.  They  were  engaged  only  in 
domestic  labor,  except  in  rare  instances,  in  1 795,  but 
now  there  are  few  occupations  in  which  they  are 
not  represented.  The  number  grows  from  census  to 
census.  This  change  was  brought  about  by  the 
adoption  of  the  factory  system,  under  which  women 
found  they  could  attend  light-running  machines  with 


14 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


skill  and  with  fair  remuneration.  While  their  com- 
pensation is  exceedingly  low  now  in  almost  all  indus- 
trial pursuits,  yet  it  is  something  where  nothing  was 
received  before.  They  constitute  a  new  economic 
factor  in  industry,  and  being  a  new  economic  factor, 
they  cannot  as  yet  hope  to  receive  liberal  wages.  It 
can  hardly  be  said  that  they  have  displaced  men,  but 
they  have  displaced  boys  and  girls  to  a  considerable 
extent.  The  first  tendency  under  the  factory  system 
was  to  employ  children,  and  the  number  constantly 
employed  increased  from  year  to  year,  until  during 
the  last  fifteen  or  twenty  years,  when  the  number  has 
been  rapidly  on  the  decline.  Public  sentiment  voiced 
by  legislation,  as  well  as  the  economies  of  production, 
is  driving  the  children  out  of  our  factories :  women 
are  taking  their  places.  In  some  industries  men  have 
taken  the  places  of  women,  the  change  of  the  form  of 
work  resulting  in  such  displacement.  Laundry  work 
is  practically  factory  work  now ;  and  the  old  domes- 
tic hand-weavers,  who  were  to  a  large  extent  women, 
have  seen  their  work  transferred  to  the  factory. 

These  industrial  revolutions  have  carried  with  them 
other  changes,  which  perhaps  are  more  ethical  than 
economical  in  their  relations.  For  instance,  under  the 
old  system  of  labor,  employers  had  a  paternal  rela- 
tion to  their  employees,  and  even  in  the  early  cotton 
mills  in  New  England  the  paternal  system  of  caring 
for  employees  was  adopted.  This  was  chiefly  notice- 
able at  Lowell,  and  later  on  also  in  Manchester, 
Conn.,  under  the  Cheneys'  administration  of  the  silk- 
works  ;  but  as  the  factory  system  has  spread  this  pa- 
ternal care  has  been  lessened,  although  during  the 
last  few  years  there  has  been  a  great  revival  in  the 
discussion  of  the  usefulness  of  such  paternal  over- 
sight. The  absolute  necessity  for  the  congregation 
of  great  bodies  of  working-people  in  one  locality  is 
everywhere  stimulating  the  thought  that  there  should 
be  some  other  rule  than  that  of  entire  non-interference 
with  the  welfare  of  employees.  The  public  is  consid- 
ering this  question,  and  great  employers  here  and 
there  are  trying  the  experiment  of  taking  an  interest 
in  the  home  welfare  of  their  employees  as  well  as  in 
their  efficiency. 

The  changes  in  the  industrial  system  have  had 
many  ramifications.  The  labor  movement  in  this 
country,  that  is,  the  organized  attempt  of  labor  to 
impress  its  aims  upon  the  whole  people,  may  be  said 
to  have  begun  with  the  century  that  is  now  closing, 
but  it  did  not  gain  full  headway  until  the  nineteenth 
century  was  fairly  on  its  way.  This  is  true,  notwith- 
standing the  labor  question  has  been  present  always 
in  the  development  of  the  world;  but  contempora- 
neous with  the  development  of  the  industries  of  the 


United  States  the  movement,  as  it  is  now  known,  has 
taken  place,  and  its  speed  has  been  accelerated  as  the 
industrial  development  has  progressed.  Prior  to 
the  establishment  of  the  factory  system  there  was  lit- 
tle organization.  Here  and  there  a  club  of  skilled 
workingmen  existed.  This  was  notably  in  the 
Eastern  and  Middle  States.  Since  1825,  however, 
the  movement  has  been  rapid,  and  its  results,  while 
not  always  satisfactory,  are  indicative  of  real  pro- 
gress. In  the  early  years  of  the  labor  movement 
many  arguments  were  advanced  against  it,  and  the 
attempt  made  to  prevent  workingmen  from  joining 
in  organization.  The  merchants  and  ship  owners 
of  Boston,  at  a  meeting  held  in  the  Exchange  Cof- 
fee Rooms  on  May  15,  1832,  voted  to  discoun- 
tenance and  check  what  was  called  the  unlaw- 
ful combination  formed  to  control  the  freedom  of 
individuals  as  to  the  hours  of  labor,  and  to  thwart 
and  embarrass  those  by  whom  they  were  employed 
and  liberally  paid.  This  meeting  was  emphatic  in 
its  declaration  that  there  was  a  pernicious  and  de- 
moralizing tendency  in  combinations  and  an  un- 
reasonableness in  any  attempt  made  by  organizations 
to  secure  more  favorable  conditions  of  work.  It  was 
held  everywhere  that  labor  ought  always  to  be  left 
free  to  regulate  itself,  and  that  neither  the  employee 
nor  the  employer  should  have  the  power  to  control 
the  other;  and  the  old  stock  argument  that  organi- 
zation would  drive  trade  from  the  country  was  re- 
sorted to  then,  as  now,  and  a  resolution  was  adopted 
at  the  meeting  referred  to,  that  the  members  of  it 
would  neither  employ  any  journeyman  who  at  the 
time  belonged  to  a  labor  combination  nor  give  work 
to  any  master  mechanic  who  employed  them  while 
they  continued  pledged  to  their  associations.  These 
statements  sound  very  much  like  those  made  at  the 
present  time,  and  yet  the  story  of  labor  organization  — 
its  course,  its  successes,  its  failures,  the  philosophy  un- 
derlying it,  and  the  influence  it  has  exerted  in  many 
directions  —  goes  to  prove  that  the  world  is  growing 
better,  and  that  the  condition  of  labor  as  it  now  exists 
is  a  vast  improvement  upon  its  condition  at  any  other 
period.  This  might  be  proved  by  an  exhaustive  cita- 
tion of  wages  and  prices  during  the  past  100  years, 
were  such  citation  necessary.  It  may,  perhaps,  be 
well  simply  to  say  that  wages,  even  during  the  past 
half-century,  have  increased,  on  the  whole,  something 
over  sixty  per  cent.,  while  the  general  course  of  prices 
has  been  downward.  This  is  true  of  other  countries 
in  which  machinery  performs  an  important  part  in 
production,  but  it  is  essentially  true  in  America,  for 
here,  with  our  vast  resources,  our  peculiar  systems  of 
education  and  of  government,  exerting  great  influence 


ONE    HUNDRED   YEARS  OF   AMERICAN   COMMERCE 


upon  the  minds  of  all,  wages  are  higher  than  in  any 
other  country  in  the  world.  The  standard  of  living 
is  necessarily  higher,  of  course,  and  the  workingman 
finds  that  he  is  able  not  only  to  preserve  his  working 
condition,  but  to  participate  in  other  things  which 
are  essential  to  his  spiritual  development. 

To-day  organized  labor  has  many  defenders.  It  is 
looked  upon  with  disfavor  in  some  quarters,  but  I 
think,  as  a  rule,  employers  are  quite  willing  that  their 
employees  should  organize,  for  they  have  their  own 
organizations  and  do  not  feel  like  denying  the  right  to 
others.  Of  course,  a  very  large  proportion  of  the 
working-people  of  this  country  are  unorganized,  and 
I  presume  this  is  true  of  manufacturers  and  employ- 
ers on  their  side ;  but  as  the  methods  of  production  are 
brought  to  a  larger  and  grander  scale,  organization  in 
every  direction  will  more  and  more  prevail.  At  pres- 
ent organized  labor  is  estimated  at  1,400,000.  This 
is  the  result  of  an  estimate  based  on  the  claims  of 
different  organizations.  I  am  inclined  to  think  it  is 
too  liberal  an  estimate,  and  yet,  placed  in  compari- 
son with  15,000,000  wage-earners,  it  does  not  seem 
large ;  but,  as  a  rule,  organized  labor  is  employed  in 
the  manufacturing  and  mechanical  industries,  and  in 
this  sense  the  percentage  is  high.  The  proportion  of 
organized  manufacturers  to  the  whole  body  is  prob- 
ably much  larger. 

As  the  labor  movement  has  grown  strikes  have 
become  more  frequent,  and  while  undoubtedly  the 
era  of  strikes  is  passing  away,  yet  it  will  be  some 
time  before  the  downward  scale  is  reached  as  to 
numbers  and  importance.  The  great  strikes  in  the 
country  have  had  a  marked  influence  in  many  direc- 
tions. They  have  excited  working-people  to  under- 
take other  strikes;  they  have  brought  bitterness 
between  employer  and  employee,  and  yet  on  the 
whole  they  are  bringing  a  new  line  of  thought  to  the 
public  mind,  and  their  study  will,  I  feel  sure,  result  in 
good  to  all  classes.  Strikes  are  teaching  the  public 
its  interests  in  industry  as  over  against  the  personal 
and  selfish  interests  of  the  two  parties  immediately 
involved. 

The  labor  question  has  met  with  a  great  change  as 
a  result  of  the  Civil  War.  Our  negro  population  has 
lost  some  of  the  old  occupations  in  which  it  was  en- 
gaged in  the  North  half  a  century  ago,  but  it  is  gain- 
ing others.  In  the  South  the  employment  of  the 
negro  is  becoming  more  varied  and  his  condition 
more  hopeful  as  one  of  pecuniary  prosperity.  Negro 
labor  is  abundant,  good,  and  steady  in  certain  lines. 
The  question  is  often  asked,  whether  the  division  of 
employment  lessens  the  quality  of  work.  I  do  not 
believe  it  does.  The  great  principles  of  modern  in- 


dustry are  association,  concentration,  and  specializa- 
tion. With  the  first  the  second  is  absolutely  essential, 
and  the  third  is  the  result  of  concentration.  If  these 
things  lessen  the  quality  of  the  work,  then  the  op- 
posite must  be  true —  that  without  them  quality  is  im- 
proved. This  carries  the  argument  too  far.  If  there 
is  much  truth  in  it,  then  the  simplest,  humblest  kind  of 
work  is  best  for  the  worker.  Sawing  wood  and  pav- 
ing streets,  the  most  ordinary  manual  toil,  are  better 
for  the  worker  than  the  employment  of  his  intellect 
in  tending  a  machine.  A  study  of  all  the  facts  leads 
to  the  positive  conclusion  that  the  division  of  employ- 
ment does  not  lessen  the  quality  of  the  worker  when 
considered  as  a  man. 

Working-people  have  experimented  with  coopera- 
tion, profit-sharing  schemes,  and  other  methods  of 
increasing  wages.  These  experiments  have  in  many 
instances  proved  failures;  in  others,  successes. 
They  are  likely  to  do  some  good,  but  it  will  be  a 
long  time  before  the  moral  character  of  the  men  in- 
volved will  permit  successful  management  of  co- 
operative schemes.  The  principle  is  right  The 
cooperative  principle  is  that  of  our  modem  system 
of  industry.  Pure  cooperation,  probably,  cannot 
succeed,  from  an  economic  point  of  view,  but  the 
cooperative  spirit  can  prevail  to  a  higher  degree 
than  it  now  does;  and  all  these  things — combinations 
of  workingmen,  public  sentiment,  economic  condi- 
tions (and  the  latter  more  largely  than  any  other)  — 
have  reduced  the  hours  of  labor  from  eleven,  twelve, 
and  thirteen  per  day  to  eight,  nine,  and  ten  per  day. 
These  changes,  however,  came  gradually,  and  as  the 
result  of  improved  methods  of  production. 

After  the  economic  changes  were  assured  law 
stepped  in  and  made  the  custom  the  public  voice. 
The  first  ten-hour  law  in  this  country,  however,  was 
not  passed  until  1874,  when  the  State  of  Massachu- 
setts provided  that  women  and  children  should  not 
be  employed  over  ten  hours  a  day  in  the  textile  fac- 
tories of  the  State.  Another  specific  change  which 
has  come  is  the  frequent  payment  of  employees  for 
their  services.  The  method  in  former  times  was  to 
pay  the  working-people  part  in  cash  and  part  in 
goods,  and  settlements  were  made  at  long  intervals. 
Now  everywhere,  with  a  few  exceptions  in  the  West, 
where  to  some  extent  the  truck  system  still  prevails, 
cash  payments  at  short  intervals  are  the  rule.  This 
change  has  been  brought  about  both  by  public  senti- 
ment and  by  statutory  enactments. 

One  of  the  greatest  changes  which  has  been 
wrought  by  the  new  system  has  come  through  cor- 
porations. When  the  century  began,  the  working- 
man  and  his  employer  were  practically  associated ; 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


they  worked  side  by  side;  they  had  a  personal  ac- 
quaintance each  with  the  other,  and  their  interests 
were,  to  a  large  extent,  practically  the  same.  With 
the  establishment  of  the  factory  system  there  came 
the  necessity  of  using  large  capital,  more  than  one 
man  or  a  firm  of  men  contributing ;  so  the  corpora- 
tion became  a  necessary  factor  in  the  development 
of  industry.  Many  small  stockholders  aggregated 
their  means  and  made  a  large  capital.  The  inter- 
ests of  the  stockholders  had  to  be  administered  by 
a  corporation  government,  and  this  corporation  gov- 
ernment employed  men  and  women.  The  ethical 
relations  were  changed  at  once.  As  a  great  capital 
is  now  the  result  of  the  aggregation  of  small  savings 
in  many  respects  —  although  in  some  instances  the 
stockholders  are  heavy  capitalists  —  the  organization 
of  labor  has  grown  on  the  ground  that  one  organi- 
zation should  deal  with  another;  that  if  the  stock- 
holders lose  their  personality  and  are  represented  by 
a  manager,  the  large  body  of  working-people  lose 
their  personality,  and  their  interests  should  be  repre- 
sented by  a  manager  or  a  committee.  One  of  the 
vital  changes  resulting  from  this  growth  of  corpora- 
tions is  the  liability  of  the  employer  to  the  employee 
for  damages  received  while  in  the  employment  of 
the  corporation.  The  old  common-law  rule  relating 
to  the  liability  of  employers  for  accidents  occurring 
to  their  employees  is  that  a  workman  cannot  recover 
damages  for  injuries  received  through  the  carelessness 
or  negligence  of  a  co-employee,  although  a  stranger 
may  recover  for  an  injury  following  the  same  care- 
lessness or  negligence.  This  rule  grew  up  under  the 
domestic  system,when  employer  and  employee  worked 
side  by  side,  and  each  knew  the  character  and  skill 
of  the  other,  and  when  several  workmen  working 
together  were  supposed  to  be  acquainted  with  the 
risks  of  their  occupation  as  well  as  with  the  character 
and  skill  of  their  co-employees.  But  when  expanded 
methods  are  introduced  this  old  rule  becomes  some- 
what ridiculous;  for  co-employees  maybe  a  brakeman 
and  a  switch-tender,  and  under  this  rule  a  brake- 
man on  a  train  running,  perhaps,  500  miles,  could 
secure  no  damages  whatever  from  a  railroad  cor- 
poration employing  him,  in  consequence  of  any  in- 
juries received  through  the  carelessness  or  negligence 
of  a  switchman  along  any  part  of  the  line,  although 
the  brakeman  knew  nothing  of  the  switchman,  had 
no  knowledge  of  his  skill  or  capacity  when  he  en- 
gaged with  the  company,  and  in  no  sense  of  the 
word,  so  far  as  risk  and  association  of  service  were 
concerned,  could  be  considered  the  co-employee  of 
the  switchman.  Yet,  as  the  common-law  rule  grew 
up  before  great  industrial  enterprises  were  estab- 


lished, courts  have  projected  it,  and  have  ruled  that 
in  such  a  case  as  that  just  mentioned  the  switchman 
and  brakeman  were  co-employees,  and  that  therefore 
the  employer  could  not  be  held  liable.  This  rule  is 
being  broken  down  by  statutory  restrictions  in  differ- 
ent parts  of  the  world,  although  it  has  not  generally 
been  modified,  and  still  holds  good  in  many  States. 

There  are  very  many  other  points  where  changes 
in  relationship  have  been  made  by  the  change  in 
system.  Looking  the  field  over  broadly,  the  con- 
clusion must  be  reached  that  on  the  whole  the  work- 
ing-people have  been  gainers  during  the  progress  of 
the  past  century  —  gainers  not  only  in  wages,  both 
real  and  nominal,  but  in  their  relations  to  society ;  so 
with  the  facts  briefly  stated  we  may  well  consider 
such  relations  and  the  general  philosophy  of  Ameri- 
can labor  conditions. 

De  Tocqueville,  when  studying  this  country,  ob- 
served that  amongst  a  democratic  people  where 
there  is  no  hereditary  wealth  every  man  works,  or 
has  worked,  to  earn  a  living,  or  is  the  son  of  parents 
who  have  worked,  and  that  in  such  a  community 
the  notion  of  labor  is  presented  to  the  mind  on  every 
side  as  the  necessary,  natural,  and  honest  condition 
of  human  existence ;  that  in  America  even  a  wealthy 
man  thinks  he  owes  it  to  public  opinion  to  devote 
his  leisure  to  some  kind  of  industrial  or  commercial 
pursuit,  or  to  public  business,  and  would  think  him- 
self in  bad  repute  if  he  employed  his  life  solely  in 
living. 

These  reflections  of  De  Tocqueville,  conveying 
the  idea  of  life  or  of  actual  living,  are  stimulated  by 
all  the  elements  which  make  up  the  essential  char- 
acteristics of  this  period.  Nearly  all  the  great  for- 
tunes, as  they  now  exist,  have  been  built  upon  the 
actual  toil  of  some  industrious  ancestor.  It  does  not 
do  for  our  wealthiest  people,  unless  they  wish  to  be 
called  simply  aristocratic,  to  look  beyond  a  genera- 
tion, or,  at  the  most,  three  generations,  to  find  their 
ancestry  engaged  in  arduous  labor,  building  from 
that  condition  to  a  business  career,  and  leaving  be- 
hind them  at  its  close  possessions  upon  which  have 
been  erected  great  fortunes.  In  some  instances,  to 
be  sure,  present  fortunes  are  the  result  of  fortunate 
speculation  or  investment  in  real  estate,  but  the  rule 
is  the  other  way,  and  as  first  stated. 

The  American  nation  consists  of  workers ;  and  at 
the  present  time  more  than  at  any  previous  period 
the  younger  members  of  very  wealthy  families  are 
devoting  their  time  and  service  to  labor  as  assiduously 
as  if  their  subsistence  depended  upon  their  earnings. 
In  America,  therefore,  labor  holds  a  more  honora- 
ble place  in  the  minds  of  all  the  people  than  it  does 


ONE    HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


17 


in  any  other  land,  and  individuals  can  look  forward 
to  the  highest  class  of  associations,  both  social  and 
intellectual,  as  a  result  of  their  application  of  skill, 
provided  always  they  are  ruled  by  integrity,  and 
shall  build  up  a  character  which  will  sustain  itself 
under  all  conditions.  A  workingman  may  not  en- 
ter the  highest  social  ranks  while  a  workingman,  es- 
pecially in  dense  social  centres,  but  in  our  country 
villages  and  large  towns  observation  teaches  that  the 
American  workingman  has  the  entree  to  the  best  so- 
ciety in  his  community,  without  regard  to  the  size 
of  his  bank-account,  character  being  the  card  on 
which  he  gains  his  admission.  I  have  attended  so- 
cial functions  where  I  have  met  skilled  mechanics 
and  wealthy  men,  and  have  found  them  meeting  on 
an  equality,  each  regarding  the  other  on  the  basis  of 
the  personal  character  which  he  brought  to  the 
function. 

There  is  another  side  to  this,  of  course,  and  a 
picture  of  certain  features  of  American  labor  can  be 
drawn  under  which  the  individual  feels  that  he 
must  keep  at  the  bottom,  at  least,  of  the  social 
ladder.  A  study  of  conditions,  however,  proves 
that  the  base  of  the  social  structure  is  growing  nar- 
rower as  time,  as  education,  as  a  wise  altruism  lead 
men  out  of  their  lowly  conditions  to  a  better  plane; 
and  the  American  laborer  everywhere  is  an  active, 
earnest,  and,  I  believe,  an  honest  factor  in  keeping 
up  the  struggle  to  secure  a  higher  standard  of  liv- 
ing. If  the  facts  were  otherwise  the  outlook  would, 
indeed,  be  a  despondent  one ;  but  a  glance  at  the 
facts  proves  the  reverse,  and  shows  that  the  propor- 
tion of  wage-earners  of  the  total  population  is  con- 
stantly increasing. 

Our  15,000,000,  and  over,  of  wage-earners  con- 
stitute a  vast  body  on  whose  prosperity,  intelli- 
gence, and  moral  worth  is  based  the  welfare  of  the 
Republic.  With  their  happiness  goes  the  happiness 
of  the  whole  people.  When  they  are  unhappy,  dis- 
turbed, and  discontented  the  Republic  is  resting  upon 
an  insecure  foundation.  I  do  not  mean  that  discon- 
tent can  or  ought  to  be  removed,  it  being  not  wise 
that  perfect  contentment  should  rule  in  all  things, 
for  perfect  contentment  means  a  stationary  condi- 
tion. Progress  can  come  only  when  the  body  of 
workers  in  a  community  are  contented  because 
moving  onward  and  upward.  Absolute  "  content- 
ment with  one's  lot  is  the  virtue  of  the  subjects  of  a 
despotically  governed  and  non-progressive  state," 
and  this  sort  of  contentment  does  not  indicate  hap- 
piness, but  a  stationary  condition,  which  ultimately 
leads  to  retrogression,  a  loss  of  ambition,  and  the 
growing  disuse  of  the  inventive  genius  of  man. 


Our  American  wage-earners  demand,  and  are  enti- 
tled to,  something  more  than  is  indicated  by  con- 
tentment, for  their  experience  with  inventions,  and 
under  our  educational  system,  teaches  them  that 
from  rude  instruments  of  toil  they  have  become 
intelligent  factors,  in  both  a  social  and  a  political 
sense.  They  are  not  simply  animals,  wanting  an 
animal's  contentment;  they  are  something  more, 
and  they  want,  and  are  entitled  to,  the  contentment 
belonging  to  the  best  environment.  They  are,  in  a 
sense,  and  a  valuable  sense,  the  patrons  of  all  that 
gives  character  to  a  great  nation.  They  believe  in 
education,  in  art,  in  music,  in  the  progress  of  the 
sciences,  and  in  political  purity,  and  are  informing 
themselves  on  the  great  topics  which  engage  the 
thoughts  of  our  statecraftsmen.  They  are  often 
able  not  only  to  present  their  views  clearly  and 
forcibly,  but  to  indulge  in  discussions  which  would 
be  a  credit  to  any  legislative  body.  These  features 
constitute  the  American  wage-earners'  exceedingly 
active,  and,  in  a  short-sighted  way,  sometimes  un- 
comfortable, elements  in  the  great  struggle  that  is 
going  on  to  lift  themselves  and  all  connected  with 
them  to  a  higher  plane  of  living.  All  who  aid  in 
this  struggle  are  the  friends  of  humanity;  all  who 
throw  obstacles  in  its  way  are  the  enemies  of 
humanity — not  knowingly,  perhaps,  but  because 
they  cannot  reach  far  enough  in  their  comprehen- 
sion of  conditions,  and  growing  conditions,  too,  to 
see  that  happiness  and  prosperity  must  be  the  result 
of  the  struggle.  Selfishness  and  ignorance  would 
keep  men  on  a  level ;  progressive  movements  mean 
more,  and  look  to  the  leading  forth  of  all  the  best 
faculties  of  all  members  of  the  community. 

All  the  disturbances  which  we  have  seen  during 
the  past  score  of  years,  and  which  seem,  super- 
ficially considered,  to  indicate  that  we  are  approach- 
ing an  industrial  war,  are  but  protests  against  fixed 
conditions.  These  disturbances  very  often  arise 
from  unwise  considerations  and  from  ignorance  of 
the  conditions  of  production,  but  they  all  indicate 
one  grand  trend ;  and  while  it  is  to  be  hoped  they 
will  grow  less  and  less  as  intelligence  develops  the 
unwisdom  of  certain  forms  of  contest,  they  must  be 
considered  as  a  part  of  the  progressive  movements 
of  our  age,  to  be  deprecated,  to  be  sure,  when  there 
is  an  inimical  animus  underlying  them  —  to  be  dep- 
recated, perhaps,  in  most  instances — and  yet,  out  of 
them,  American  labor  emerges  with  a  clearer  under- 
standing of  the  inevitable  conditions  of  life  and  a 
clearer  view  of  the  higher  ethical  elements  essential 
to  overcome  them.  These  views  constitute  the  chief 
elements  of  what  is  known  as  the  labor  movement, 


18 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


in  which  American  labor  has  actively  participated 
for  a  great  many  years  — first,  seeking  organization; 
second,  by  organization,  making  its  protests  and 
issuing  its  demands.  Philosophically,  these  protests 
and  demands  must  be  viewed  as  educational  factors 
and  not  as  war  factors. 

I  have  always  liked  the  definition  of  labor  which 
John  Ruskin  has  given  us.  "  Labor,"  he  says,  "  is 
the  contest  of  the  life  of  man  with  an  opposite;  the 
term  '  life '  including  his  intellect,  soul  and  physical 
power,  contending  with  question,  difficulty,  trial  or 
material  force.  Labor  is  of  a  higher  or  lower  order 
as  it  includes  more  or  fewer  of  the  elements  of  life ; 
and  labor  of  good  quality,  in  any  kind,  includes 
always  as  much  intellect  and  feeling  as  will  fully 
and  harmoniously  regulate  the  physical  force." 
The  truth  of  this  definition  must  be  accepted,  and 
with  its  acceptance  the  labor  movement,  so-called, 
is  at  once  lifted  from  a  sordid  to  a  high  ethical 
plane;  taken  out  of  narrow  grooves  and  made  to 
become  the  very  essence  of  the  whole  of  the  relig- 
ious and  political  movements  of  the  closing  years  of 
this  century.  Whether  Ruskin's  definition  is  recog- 
nized or  not,  the  truth  exists,  and  so  the  struggle  of 
the  wage-earner  becomes  of  that  high  order  which 
insists  upon  recognition  as  a  factor  in  securing  to  all 
people  something  beyond  the  mere  wants  of  exist- 
ence. A  man  who  is  working  simply  to  secure  food, 
shelter,  and  raiment,  that  is,  the  conditions  abso- 
lutely essential  to  keep  him  an  efficient  working 
machine,  is  not  the  best  product  of  civilization; 
but  the  man  who  is  willing  to  work  industriously  to 
secure  these  absolute  necessaries  to  make  his  serv- 
ices efficient,  and  then,  over  and  beyond  them, 
something  of  the  spiritualizing  necessaries  of  life,  is 
a  credit  to  our  civilization ;  and  these  spiritualizing 
influences  can  be  secured  only  when,  after  paying 
for  the  necessary  lubrication  of  his  working  muscles, 
he  is  able  to  furnish  himself  and  his  loved  ones  with 
elements  of  life  which  have  heretofore  been  consid- 
ered luxuries.  He  must  be  able  to  secure  some- 
thing of  these  higher  elements,  or  he  loses,  and 
retrogression  is  the  result.  He  must  be  able  to 
educate  his  family,  and  to  give  them  of  the  best 
things  of  life  to  such  an  extent  that  they  become 
active  participants  in  the  results  of  invention,  which 
throw  around  life  everywhere  more  than  could  be 
secured  under  old  conditions. 

With  his  conscience  quickened  by  the  very  atmos- 
phere that  surrounds  him,  the  wage-earner  under- 
stands, more  than  any  other  wage-earner  anywhere, 
that  the  sacredness  of  property  must  be  insisted 
upon  and  preserved,  and  that  all  attacks  upon  ex- 


isting institutions  must  be  repelled,  especially  when 
those  attacks  are  made  for  the  purpose  of  destruc- 
tion with  a  view  to  the  building  of  a  new  structure 
upon  the  ruins  of  the  old.  He  is  often  radical  in 
his  political  views,  but  as  a  class  in  the  community 
he  is  ready  to  aid  in  the  improvement  of  govern- 
mental and  social  structures  rather  than  to  assist  in 
their  destruction,  even  when  the  view  is  presented 
that  only  on  their  destruction  can  a  properly  devel- 
oped new  structure  be  erected.  He  is  often  led 
away  by  specious  arguments,  and  under  such  condi- 
tions allies  himself  to  various  so-called  progressive 
movements;  but  he  is  always  open  to  conviction, 
and  when  he  sees  that  he  is  simply  being  led  on  the 
old,  well-beaten  paths  of  iconoclasm,  he  turns  and 
allies  himself  with  those  who  are  seeking  real  and 
true  progress  through  evolutionary  processes. 

The  American  workingman  is  sometimes  a  social- 
ist, but  he  does  not  believe  that  socialism,  and  espe- 
cially political  socialism,  has  anything  in  it  which 
will  help  him  to  secure  the  coveted  margin  over 
necessaries — anything  that  will  help  him  to  things 
spiritualizing.  He  is  a  socialist,  as  a  rule,  in  a  cer- 
tain sense,  but  his  socialism  is  not  political;  it  comes 
from  a  spirit  within  him,  and  it  seeks  to  aid  all  who 
are  engaged  with  him  in  the  struggle  to  secure  better 
environment.  This  sort  of  socialism  in  American 
labor  has  no  danger  in  it.  On  the  other  hand,  it 
is  critical  in  its  nature,  and  thus  helps  the  whole 
body  of  the  people  to  understand  what  evils  exist 
and  what  conditions  ought  to  be  secured  in  their 
place. 

The  American  laborer,  as  such,  is  never  an  an- 
archist, for  he  is  a  law-and-order  man,  and  believes 
that  through  development  of  the  individual  char- 
acter the  best  social  conditions  can  be  reached.  Now, 
as  the  wage-earners  of  this  country  comprehend  these 
high  and  moral  grounds  more  fully  and  more  clearly, 
they  will  become  more  contented  in  the  true  sense — 
not  contented  to  stand  still,  but  contented  with  the 
knowledge  that  they  are  progressing. 

From  what  has  been  said  it  will  be  clearly  under- 
stood that  conditions  are  not  always  favorable;  that 
there  are  fluctuations,  business  depressions,  having 
their  discouraging  influence,  and  strikes,  unsettling 
the  public  mind.  The  clash  between  ethical  and  eco- 
nomical conditions  leads  to  disruptions  sometimes  in 
business  associations,  and  arrays,  to  all  appearances, 
capital  on  the  one  side  and  labor  on  the  other,  and 
gives  color  to  the  prophecy  sometimes  put  forth  that 
ultimately  this  clash  will  lead  to  bloody  strife.  I 
cannot  acquiesce  in  this  view,  although  I  see  clearly 
the  clash  itself,  and  largely  the  causes  for  it.  The 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


19 


causes  are  mostly  ethical,  growing  out  of  the  rela- 
tions of  men  and  the  lack  of  appreciation  of  the  duty 
which  is  owed  to  the  public.  Macaulay  said  that 
the  evils  arising  from  liberty  were  only  to  be  cured 
with  more  liberty.  So  the  evils  which  apparently 
surround  us  at  the  present  time,  and  which  appar- 
ently grow  out  of  the  industrial  world,  are  the  results 
of  an  intelligence  which  did  not  exist  in  the  past,  and 
the  cure  for  them  is  more  intelligence.  Capital  and 
labor  are  intelligent  enough  to  get  into  difficulty: 
they  are  not  intelligent  enough  yet  to  keep  out  of  diffi- 
culty. It  requires  a  very  high  moral  character  on  the 
part  of  both  employer  and  employee  for  each  to  rec- 
ognize the  rights  and  the  privileges  of  the  other;  but 
with  this  recognition,  quarrels,  as  such,  will  largely 
cease,  and  contests  of  mind  will  take  the  place  of 
those  unhappy  contests  which  are  now  so  frequent. 
When  the  employee  recognizes  that  his  highest  social 
duty  is  to  render  the  very  best  service  of  which  he  is 
capable,  and  the  employer  recognizes  that  his  highest 
social  duty  is  to  compensate  the  best  service  with 
the  best  wage,  a  vast  deal  of  friction  will  be  avoided. 
Integrity  of  business  involves  both  the  employing 
and  the  employed  elements  of  society.  Confidence 
in  each  other  is  the  surest  cure  for  many  of  the  dif- 
ficulties, and  while  the  world  is  growing  altruistic, 
it  will  not  grow  altruistic  at  the  expense  of  individ- 
ual development;  but  after  the  rendering  of  the  best 
social  service  there  will  come  a  coordinated  force 


involving  both  altruism  and  individualism.  Either 
means  destruction  in  a  degree.  Coordination  means 
success  and  reasonable  happiness.  The  ethical  force 
cannot  rule  at  the  expense  of  the  economical,  nor  can 
the  economical  force  rule  at  the  expense  of  the  eth- 
ical. Their  coordination  is  the  true  line  of  progress. 
As  American  labor  comprehends  this  more  and 
more  clearly,  and  I  believe  it  is  comprehending 
these  principles,  and  as  the  employer  comprehends 
them  more  and  more  clearly — and  I  believe  that  he 
is  so  doing  —  we  may  hope  for  the  adjustment  of  dif- 
ficulties on  a  plane  of  moral  responsibility  not  yet 
reached,  except  incidentally.  The  settlement  of  labor 
controversies  is  one  thing,  their  prevention  another. 
If  the  intelligence  of  different  elements  has  not  reached 
that  degree  whereby  they  can  be  prevented,  then 
there  should  be  some  recognition  of  that  settlement 
and  adjustment  which  recognize  the  importance  of 
each  side  in  the  success  of  industrial  enterprises.  Amer- 
ican labor  is  doing  much,  and  can  do  much  more,  in 
bringing  about  such  prevention  and  such  adjustment. 
May  every  struggle  to  that  end  meet  with  the  cordial 
appreciation  and  support  of  all  right-minded  citi- 
zens! The  century  closes  with  omens  of  this  con- 
summation. We  must  not  look  for  Utopias  nor  the 
millennium ;  but  we  must  look  for  the  evolution  of 
moral  forces  through  industrial  forces,  for  society 
flourishes  or  decays  as  industrial  elements  prosper 
or  decline. 


CHAPTER    III 

IMPORTS  AND   EXPORTS 


THE  imports  and  exports  of  the  United  States 
are  the  expression  and  measure  of  its  com- 
mercial dealings  with  the  nations  and  peoples 
of  the  world.  Their  development  and  importance 
have  been  commensurate  with  the  economic  growth 
and  political  power  of  the  country  and  people.  To 
compare  the  foreign  trade  of  the  United  States  in  1 79  5 
with  that  in  1895  would  be  to  compare  a  wheelbarrow 
with  a  locomotive  or  an  ocean  liner.  The  local  na- 
ture, the  simplicity  of  character,  and  the  limited  quan- 
tity of  the  trade  in  the  earlier  period  have  become  the 
world-wide,  the  complex,  and  enormously  extended 
commerce  of  to-day.  Then  the  trade  was  confined 
as  well  by  the  limited  markets  as  by  the  selfish  greed 
of  nations  possessed  of  colonial  dependencies,  mo- 
nopolized by  themselves  in  production  and  in  com- 
merce. Then  the  long  and  comparatively  infrequent 
voyages  made  commerce  a  matter  of  speculation, 
of  widely  fluctuating  prices,  of  capital  at  risk,  and 
consequently  of  doubtful  returns.  Now  the  world 
is  one  great  market  to  buy  and  to  sell  in.  Prices  are 
equalized  and  made  stable  by  banking  facilities,  by 
rapid  communication  by  mail  or  telegraph,  by  fre- 
quent voyages,  and  by  the  free  and  cosmopolitan 
movements  of  labor  and  capital.  The  millions  ven- 
tured in  foreign  trade  in  the  last  century  have  be- 
come the  hundreds  of  millions  embarked  in  foreign 
trade  to-day ;  and  over  and  above  the  great  transfer 
of  commodities  from  country  to  country  there  is  a 
large  and  ever-increasing  transaction  in  securities, 
national,  State,  and  corporate.  Mere  statistics  can 
convey  only  one  idea  of  this  growth  and  develop- 
ment. They  may  point  out  the  mass  or  quantity, 
which  is  the  least  interesting  and  vital  phase  of  the 
question ;  but  the  nature  or  character  of  that  mass 
has  also  materially  changed.  It  is  on  this  change 
of  nature  that  I  wish  to  say  something. 

When  the  peace  of  1783  was  declared  the  United 
States  comprised  a  strip  of  territory  on  the  At- 
lantic Ocean  extending  from  Maine  to  Florida,  and 


bounded  on  the  west  by  the  Mississippi  River.  In 
1790  the  total  area  of  settlement  v/as  239,935  square 
miles,  having  a  population  of  3,929,214  souls.  In 
this  comparatively  limited  area  important  commer- 
cial products  were  raised.  The  tobacco  of  Virginia 
and  Maryland  supplied  the  world ;  the  rice  and  in- 
digo of  the  Carolinas  stood  high  in  European  mar- 
kets ;  and  the  fish  and  lumber  products  of  New  Eng- 
land, with  the  breadstuff's  of  the  Middle  States,  gave 
a  large  and  profitable  commerce  with  the  West  Indian 
Islands,  then  colonial  possessions  of  Europe.  In 
New  York  the  fur  trade  centered,  and  even  as  early 
as  this  time  the  Northwest  Territory  pointed  to  an 
agricultural  possibility  which  fifty  years  later  was 
to  begin  an  economic  revolution  in  Europe,  the  re- 
sults of  which  are  still  incomplete.  The  extension 
of  national  territory  west  of  the  Mississippi,  and 
southward  so  as  to  include  Florida  and  Texas,  has 
contributed  to  develop  commerce  on  almost  the 
same  lines  which  were  marked  out  in  the  first  years 
of  the  Republic. 

It  was  agriculture  in  1795  which  contributed  most 
largely  to  the  export  trade ;  it  is  agriculture  in  1895 
which  still  feeds  the  largest  part  of  the  exports. 
The  rise  of  cotton  culture,  and  its  rapid  extension 
through  the  South,  were  the  leading  features  of  our 
export  development  for  fifty  years.  The  rapid  set- 
tlement of  the  West,  and  an  enormous  extension  of 
agricultural  production  in  cereals  and  provisions, 
were  the  leading  features  of  the  subsequent  forty 
years.  Beginning  with  1816,  the  establishment  of 
manufactures,  fostered  and  assured  by  the  peculiar 
inventiveness  of  Americans,  laid  the  foundation  of 
industries  which  at  the  end  of  eighty  years  are  fitted 
in  many  lines  not  only  to  compete  with,  but  almost 
to  supply,  the  world.  In  1895  the  estimated  popu- 
lation of  the  country  was  70,000,000  and  the  area 
of  the  country  in  land  surface  was  2,970,000  square 
miles.  The  value  of  domestic  exports  per  capita 
of  population  in  the  last  decade  of  the  eighteenth 


WORTHINGTON    C.  FORD. 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


21 


century  was  somewhat  less  than  $6 ;  the  per  capita 
exports  in  1895  were  over  $11.  The  productive 
capacity  of  the  country  has  thus  been  sufficient  to 
feed,  clothe,  and  support  in  increasing  comfort  a 
population  which  has  increased  in  numbers  seven- 
teenfold ;  and  at  the  same  time  afforded  a  surplus 
which  has  given  an  export  trade  double  in  relative 
importance  and  increased  fifty  or  sixty  fold  in  abso- 
lute value,  as  the  $800,000,000  of  1895  represent  an 
enormous  trade,  conducted  on  a  basis  of  low  prices, 
compared  with  the  trade  of  1795,  conducted  under 
the  regime  of  high  prices. 

The  lasting  and  substantial  qualities  of  American 
export  trade  are  proved  by  its  survival  of  accidents 
and  adverse  conditions  which  threatened  at  times 
to  overwhelm  it.  The  Napoleonic  wars  practically 
closed  the  ports  of  the  civilized  world  to  American 
products  and  American  shipping,  and  the  disaster 
was  aggravated  by  the  domestic  Embargo.  Wild- 
cat banking  schemes  have  periodically  swept  over 
the  country,  entailing  wide-spread  ruin  and  economic 
disturbance,  shaking  the  commercial  system  of  the 
country  to  its  very  foundation.  State  and  corpo- 
ration repudiation  and  defalcation  have  at  times 
thrown  a  cloud  over  American  interests,  and  have 
retarded  development,  while  even  destroying  some- 
thing of  what  had  already  been  accomplished.  To 
these  exceptional  and  preventable  conditions  should 
be  added  others  which  the  economist  has  recognized 
as  periodic  and  inevitable — recurrent  waves  of  finan- 
cial distress  and  commercial  depression,  which  have 
seemed  to  follow  a  definite  law,  and  yet  can  never 
be  foreseen,  or  their  effects  provided  against  and 
neutralized. 

The  geographical  distribution  of  exports  would 
necessitate  a  sketch  of  the  changes  in  political  divi- 
sions throughout  the  world  during  the  century.  The 
breaking  up  of  the  old  colonial  system  and  the  rise 
of  independent  States  and  powers,  the  formation 
of  alliances  essentially  modifying  the  sovereignty  of 
political  divisions,  have  introduced  so  many  new 
conditions  that  the  geographical  nomenclature  of 
1795  will  not  apply  in  1895.  The  great  Spanish 
and  Portuguese  colonies  in  the  New  World  have 
with  few  exceptions  become  emancipated  from  the 
mother  countries,  and  as  independent  powers  have 
sought  and  developed  commercial  connections  pro- 
hibited under  the  mercantile  system  of  the  last  cen- 
tury. Central  and  South  America  have  framed  and 
maintained  commercial  systems  of  their  own,  instead 
of  feeding  and  supporting  a  commerce  profitable 
only  to  the  mother  state.  The  Floridas  in  1795 
were  counted  among  the  possessions  of  Spain.  Hayti 


was  a  French  colony.  Germany  had  no  existence  as 
a  united  power,  and  the  Hanse  towns  represented 
commercial  Germany.  The  trade  with  Canada  was 
of  little  importance.  Australia  was  a  geographical 
name.  Texas  was  part  of  a  foreign  country,  as  was 
all  westward  of  the  Mississippi ;  and  the  exchange  of 
merchandise  with  Africa  and  Asia,  while  important 
even  at  that  day,  was  limited  in  its  development  by 
local  hostilities  and  by  trading  monopolies. 

The  embryonic  condition  of  exports  is  shown  by 
the  distribution  of  1 795.  Of  a  total  of  nearly  $48,- 
000,000  outgoing,  $31,000,000  were  sent  to  Euro- 
pean countries,  $14,000,000  to  the  West  Indian 
possessions  of  those  countries,  and  $3,000,000  to 
all  the  rest  of  the  world.  The  intimate  connection 
between  political  and  commercial  conditions  is  shown 
by  the  fact  that  the  exports  to  France  and  the  French 
West  Indies  were  $12,653,635  ;  to  the  Hanse  ports, 
$9,655,524  ;  while  to  Great  Britain  and  her  posses- 
sions in  the  West  Indies  and  North  America  the 
exports  were  $9,218,540.  France  ranked  first  in 
importance,  Germany  second,  and  Great  Britain 
third.  The  treaty  of  Jay  and  the  necessities  of  the 
British  West  Indies  made  necessary  some  alterations 
in  the  regulations  imposed  by  Parliament  on  colo- 
nial trade,  and  these  changes  were  reflected  in  the 
current  of  the  leading  exports  of  the  United  States. 
France  lost  her  dominant  position  and  was  super- 
seded by  Great  Britain.  This  relative  position  has 
never  been  changed. 

A  study  of  the  yearly  fluctuations  in  the  export 
trade,  and  a  general  statement  of  the  leading  causes, 
would  be  of  exceeding  interest.  Each  article  would 
present  the  material  for  a  study  of  commercial  con- 
ditions as  influenced  by  competition,  production,  or 
political  factors.  This,  however,  would  be  out  of 
the  question  in  an  article  of  this  length.  The  high- 
est development  of  exports  has  occurred  within  the 
last  thirty  years,  when  the  rapid  settlement  of  the 
West,  and  the  improved  methods  of  transportation 
have  enabled  its  products  to  reach  a  market  at  such 
rates  as  allow  aggressive  competition  with  similar 
products  of  other  exporting  countries.  Without 
modern  appliances  the  large  export  trade  in  fresh 
meats,  butter,  fruits,  and  even  oleomargarine,  could 
not  exist. 

Another  side  of  this  story  is  of  high  economic 
value,  showing  how  a  productive  interest  may  wane 
and  die  through  the  rise  of  more  favorable  condi- 
tions elsewhere  for  producing  or  marketing,  or  by 
the  discovery  of  other  products  which  will  better 
attain  the  end  to  which  they  are  the  means.  In 
the  same  manner  an  interest  may  out  of  a  very  small 


22 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


beginning  become  sufficiently  important  to  control 
the  market  of  the  world.  A  century  ago  indigo  was 
a  large  product  of  the  Carolinas ;  it  ceased  to  be  an 
article  of  export,  in  quantity,  at  the  beginning  of  the 
century.  The  United  States  was  a  large  exporter 
of  rice  in  1795 ;  in  1895  it  was  an  even  larger  im- 
porter. Forty  years  ago  whaling  was  a  profitable 
pursuit,  and  whale  and  fish  oils  constituted  an  item 
of  export.  That  industry  has  almost  disappeared  as 
a  commercial  factor ;  but  the  $2,000,000  or  $3,000,- 
ooo  worth  of  whale-oil  has  been  more  than  compen- 
sated by  the  $45,000,000  of  exports  of  petroleum, 
an  article  which  came  into  use  about  thirty  years  ago. 

The  ills  of  other  nations  have  at  times  redounded 
to  the  benefit  of  the  United  States.  European  wars 
created  an  opening  for  the  prepared  meat  products 
of  the  West ;  the  vine  diseases  in  the  wine  countries 
of  Europe  gave  an  opportunity  for  an  export  of 
American  wine — an  export  which  must  grow.  Coal 
was  not  sent  abroad  in  any  quantity  till  1850,  but  it 
now  represents  a  trade  of  more  than  $10,000,000. 
Cotton  was  imported  from  the  West  Indian  Islands 
in  1795 ;  it  has  long  been  the  principal  item  of  ex- 
port. Copper,  when  it  touched  $2,000,000  in  the 
trade  returns  of  1858,  was  believed  to  have  reached 
a  very  high  point ;  but  that  product  of  the  American 
mine  now  controls  the  world's  markets,  and  an  ex- 
port of  $13,000,000  is  not  believed  to  have  touched 
an  even  reasonable  limit. 

In  1895,  seventy  per  cent,  of  the  total  value  of 
domestic  exports  was  composed  of  agricultural  pro- 
ducts. The  products  of  the  fisheries  and  of  the 
forest  and  mining,  partaking  of  the  qualities  of  agri- 
cultural products  in  being  subject  to  the  law  of 
diminishing  returns,  raised  the  proportion  to  seventy- 
seven  per  cent.,  leaving  about  twenty-three  per  cent, 
contributed  by  American  manufactures.  The  arti- 
cles of  food  and  the  crude  materials  of  manufactures 
are  exported  to  countries  which  have  developed  in- 
dustrial rather  than  agricultural  systems,  and  which 
need  the  food  to  support  their  laboring  populations, 
and  the  raw  materials  to  feed  their  industries.  So 
long  as  the  United  Kingdom  held  almost  the  mo- 
nopoly in  the  great  manufacturing  industries  where 
machinery  has  superseded  hand  labor,  our  export 
trade  was  chiefly  with  that  country.  Within  twenty- 
five  years  the  rise  of  large  manufacturing  interests 
on  the  Continent,  and  the  extension  of  merchant 
marines  of  continental  countries,  have  been  reflected 
in  the  direction  of  American  exports.  What  would 
formerly  have  gone  to  Great  Britain  and  thence  been 
distributed  throughout  continental  Europe  is  now 
sent  to  the  continental  countries  direct. 


To  sum  up,  the  United  States  export  trade  con- 
tributes the  cotton  used  in  cotton  manufactures 
wherever  the  industry  is  developed ;  by  its  bread- 
stuffs  and  provisions  it  contributes  a  necessary  ele- 
ment to  the  support  of  the  industrial  peoples  of  other 
lands,  supplying  a  cheap  and  wholesome  food ;  its 
mineral  oils  are  to  be  found  everywhere,  giving  a 
cheap  and  safe  light  to  peoples  who  have  lived  here- 
tofore in  semi-darkness ;  its  tobacco  has  always  been 
appreciated,  as  have  its  naval  stores ;  its  agricultural 
implements  and  tram-cars,  its  clocks  and  watches, 
and  its  rubber  goods  are  evidences  of  a  superior 
inventive  ability.  The  lines  of  the  export  trade  of 
the  United  States  are  so  broad  and  well  defined  that 
nothing  within  the  reach  of  human  possibilities  can 
destroy  their  main  features. 

The  imports  do  not  require  the  special  study  that 
exports  seem  to  demand.  The  latter  are  a  fair  gauge 
of  the  productive  capacity  of  the  country,  for  it  is 
only  the  surplus  product  which  can  be  exported — 
that  which  is  beyond  domestic  consumption.  Im- 
ports measure  the  purchasing  ability  of  the  people 
and  constitute  a  rough  measure  of  the  industrial 
advancement  and  of  the  degree  of  taste  and  well- 
being  attained.  The  development  of  the  import 
trade  has  been  a  process  of  selection,  rejecting  one 
class  or  article  and  taking  others,  as  the  domestic 
supply  is  sufficient  or  wanting.  In  the  last  century 
all  manufactures  of  a  grade  above  the  crudest  were 
brought  in  from  abroad.  There  were  few  "  indus- 
tries "  outside  of  the  household  industries,  and  con- 
sequently little  or  no  demand  for  raw  material  of 
manufacture.  A  little  cotton  was  imported ;  some 
lead  from  England ;  and  hemp,  cordage,  and  cables 
from  Russia  gave  material  for  ship  building;  but 
these  few  articles  comprise  all  the  imports  which 
can  be  directly  identified  with  "  industry."  In  1795 
a  little  unwrought  steel  came  from  the  United  Neth- 
erlands ;  somewhat  later  Swedish  bar-iron  took  its 
place ;  but  manufactured  iron  and  steel  have  come 
from  the  United  Kingdom. 

Compared  with  such  a  situation,  the  imports  of 
1895  offer  a  striking  contrast.  That  there  are  a 
large  number  of  commodities  of  almost  necessary 
consumption  which  cannot  be  grown  or  prepared 
in  the  United  States  needs  no  proof.  Tea,  coffee, 
sugar,  spices,  and  such  tropical  products  can  be  ob- 
tained in  the  required  quantities  by  exchange  more 
easily  and  cheaply  than  by  growing  them.  Articles 
of  food  will,  therefore,  always  constitute  a  large  item 
of  imports,  and  in  1895  constituted  one  third  of  the 
total.  Imports  of  the  crude  materials  of  manufac- 
tures—wool, cotton,  flax,  and  hemp,  coal  and  iron, 


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ONE    HUNDRED   YEARS   OF   AMERICAN    COMMERCE 

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ro  o  o  f  ' 

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cf  M"  «"  i-Tco"  d>  w"  «  to  d  to«o"  to 
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toiot«.e«  r--oo   m  9»G   f   "   N  to  o  m  •«  «o   n 
•*  10  M  r^  o  i^-co  «  *o^  oo  •*  Ooo  m«  m  •*• 
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oo  t^co  **  »o  t^oo  t*.  r-  to  v  ••••*•  i^.  t-ob  N  -  «  10 
t>e>*^  moo  O"O  «  oo  -  -O  O  •«•(» 

" 


M  m  o  rC  p"  s 


^  lO-O  VO  05  8  O 


o«  o  o  ••  o 


24  ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 

and  silk— constitute  a  measure  of  industrial  growth  thirds  of  the  entire  imports  are  received  through 

and  conditions.     By  the  establishment  of  domestic  New  York,  and  more  than  one  half  of  the  exports 

industries,  and  by  the  refining  of  demand  through  are  sent  out  through  that  port.     The  main  geo- 

the  accumulation  of  wealth  and  the  education  of  graphical  features  of  the  foreign  commerce  of  the 

taste,  better  products  are  demanded  of  both  foreign  United    States   are   shown   by  the   accompanying 

and  domestic  manufacture.    In  1895  the  imports  of  figures : 

IMPORTS  AND  EXPORTS  IN   1895  BY  GEOGRAPHICAL  DIVISIONS. 


IMPORTS. 

PEE  CENT. 

EXPORTS. 

PER  CENT. 

PER  CENT.  OF  IM- 
PORTS AND  EXPORTS. 

$•183,645,813 

52.4 

$627,927,692 

77-7 

65.72 

133,915,682 

18.3 

108,575,594 

13-4 

15-74 

112,167,120 

'5-3 

33.525.935 

4-2 

9.46 

77,626,364 

10.6 

I7.325.057 

2.2 

6.17 

17,450,926 

2.4 

13,109,231 

1.6 

1.98 

?,  700,160, 

.8 

6,377,842 

.8 

•79 

1454,891 

.2 

696,814 

.1 

.14 

Total            

$731,969,965 

$807,538,165 

100.00 

$613,737,342 

83.8 

$590,392,743 

73  i 

78.21 

Gulf  ports                      

18,865,503 

2.6 

130,275,045 

16.  i 

9.69 

40,568,501 

5.5 

36,879,310 

4.6 

Northern  border  and  lake  ports   .    .  . 

51,016,783 
7,78l,8-j6 

7.0 
I.I 

49,991,067 

6.2 

.CI 

Total                   

$7'U,  060.061; 

$807,538,165 

IOO.OO 

materials  in  a  crude  condition  for  use  in  domestic 
industries  comprised  more  than  one  fourth  of  the 
total  imports.  What  remained  were  articles  manufac- 
tured which  could  not  be  obtained  in  this  country 
to  meet  the  tastes  of  the  consumer  or  to  gratify  the 
whims  of  fashion.  The  crude  materials  are,  as  a 
rule,  obtained  from  agricultural  countries  of  recent 
settlement,  or  from  older  countries  sparsely  popu- 
lated, with  a  semi-civilized  people.  Australia  is  the 
great  source  of  wool-supply ;  Cuba  of  sugar,  Brazil  of 
coffee,  Asia  of  silk,  Egypt  of  raw  cotton,  and  South 
American  countries  of  hides,  skins,  and  india-rubber. 
Manufacured  articles  are  of  European  origin. 

A  word  may  be  added  on  the  geographical  dis- 
tribution of  imports  and  exports  in  1895.  The 
United  Kingdom  received  forty-eight  per  cent,  of 
the  exports  and  contributed  twenty-two  per  cent. 
of  the  imports.  No  other  country  approaches  this 
percentage  in  American  trade.  The  natural  advan- 
tages of  the  harbor  of  New  York  long  since  pointed 
it  out  as  a  great  commercial  center ;  while  the  enter- 
prise and  liberality  of  State  and  citizens  in  making 
internal  improvements  have  enabled  it  to  maintain 
a  dominant  position  in  the  face  of  intense  and  ap- 
parently almost  destructive  competition.  Canals 
and  railways  and  banking  institutions  having  foreign 
connections  have  made  the  city  what  it  is.  Two 


Foreign  commerce  must  grow  with  the  increase 
of  population  and  wealth.  From  time  to  time  fears 
have  been  expressed  that  the  United  States  is  not 
holding  its  own  in  foreign  markets  ;  that  its  products 
are  being  undersold  by  similar  products  of  other 
nations.  Russian  and  Indian  wheat,  Indian  and 
Egyptian  cotton,  Russian  petroleum,  and,  last,  the 
grain  products  of  the  Argentine  Republic,  have  ex- 
cited apprehensions  the  full  extent  of  which  have 
never  been  realized.  That  competition  from  the 
outside  must  produce  some  effect  need  not  be  ques- 
tioned ;  but  that  this  effect  could  ever  end  fatally  to 
the  productive  interests  of  the  United  States  is  be- 
yond belief.  If  the  agricultural  products  of  our 
country  no  longer  meet  with  favor  in  foreign  mar- 
kets, there  will  always  be  room  for  our  manufactures, 
the  export  of  which  has  shown  in  recent  years  a 
marked  increase.  In  1875  the  value  of  exported 
manufactures  was  $92,678,814,  constituting  16.57 
per  cent,  of  the  total  exports.  In  1895  the  value  of 
manufactures  was  $183,595,743,  constituting  more 
than  twenty-three  per  cent,  of  the  total.  It  is  in 
this  direction  that  the  greatest  development  of 
American  exports  must  lie ;  and  the  field  is  so  vast 
that  it  will  more  than  compensate  for  any  reduction 
in  demand  for  food  products  or  for  materials  in  a 
raw  condition. 


Q. 


V  T  T  T  T 


CHAPTER   IV 

INTERSTATE   COMMERCE 


r  I  AHE  colonies,  under  the  lead  of  Massachu- 
setts, early  attempted  to  provide  roads ;  yet 

.A.  for  more  than  two  hundred  years  nothing  ex- 
isted in  this  country  that  by  any  stretch  of  the  ima- 
gination could  be  called  a  postal  service.  The  only 
carriers  of  commerce  for  nearly  two  hundred  years 
after  the  first  settlers  sought  these  shores  were  the 
simple  sailing  vessels,  that  crossed  the  ocean  only  at 
the  greatest  hazard.  Courageous  attempts  to  navi- 
gate the  ocean  waters  and  the  almost  unknown  rivers 
and  lakes  were  numerous  before  1800,  and  canals, 
even,  were  attempted.  It  can  hardly  be  said,  how- 
ever, that  anything  deserving  the  name  of  interstate 
commerce  existed  in  this  country  at  the  beginning  of 
the  present  century,  since  at  that  time  the  total  effects 
of  the  government  were  transported  from  Philadelphia 
to  Washington  in  a  frail  sloop,  and  President  John 
Adams  and  his  wife  lost  their  way,  as  tradition  has 
it,  in  the  woods  beyond  Baltimore,  as  they  proceeded 
in  their  carriage  toward  the  new  capital.  The  Alle- 
ghanies  constituted  an  almost  impassable  barrier  be- 
tween the  East  and  the  West,  and  such  necessary 
products  as  the  colonists  could  not  obtain  in  their 
immediate  neighborhoods  were  mostly  brought  from 
over  seas. 

There  was  another  difficulty  in  the  way  of  trade. 
The  high  price  of  labor  rendered  it  impossible  to 
manufacture  linen,  cotton,  or  woolen  cloth,  except 
at  a  cost  twenty  to  fifty  per  cent,  greater  than  the 
same  stuffs  could  be  turned  out  for  in  England.  The 
trade  of  New  Hampshire  was  principally  in  lumber 
and  fish,  which  were  exported.  In  Massachusetts  a 
little  wool  and  flax  were  worked  into  a  coarse  cloth, 
and  a  few  hats  were  made,  but  it  was  cheaper  to 
import  them.  In  the  province  of  New  York  the  ex- 
port of  furs,  whalebone,  oil,  pitch,  tar,  and  provisions 
included  everything.  So  it  was  in  New  Jersey. 
Virginia  produced  nothing  for  intercolonial  trade. 


Tobacco  was  a  permanent  staple,  but  it  became 
chiefly  an  export.  The  early  colonists  were  inevi- 
tably sailors.  Therefore  a  considerable  coasting  trade 
grew  up,  but  there  were  no  means  of  internal  trans- 
portation except  by  wagons  and  the  rude  craft  plying 
the  natural  waterways.  In  spite  of  this  the  Consti- 
tution, which  went  into  operation  March  4,  1789, 
embraced  the  right  to  regulate  domestic  commerce, 
— a  right  not  conferred  by  the  previous  Articles  of 
Confederation, — and  from  that  year  one  may  find 
exhibits  of  the  tonnage  employed  in  the  coastwise 
trade.  In  1789  this  tonnage  was  78,607;  in  i8ia 
it  was  477.971- 

The  Americans  of  those  early  times  had  only  a 
vague  knowledge  of  the  country  west  of  the  moun- 
tains ;  yet  the  hardy  settlers  along  the  coast  soon  beat 
out  for  themselves  paths  to  this  unknown  region.  The 
act  to  provide  for  the  Cumberland  road  was  passed 
in  1806,  and  the  first  stage-coach  driven  from  Cum- 
berland to  Wheeling  in  1818.  The  length  of  the  line 
first  opened  was  130  miles,  and  its  cost  $1,700,000. 
In  those  years,  too,  were  tried  the  first  experiments 
with  steam-craft.  Livingston  and  Fulton  built  the 
Clermont  in  1807,  and  Fulton  claimed  under  his  pat- 
ent a  monopoly  of  transportation  on  the  Hudson  and 
other  rivers.  His  claim  was  carried  to  the  courts 
and  defeated,  so  that  after  1815  the  rivers  of  the 
country  were  free  to  steam- vessels.  In  1812  steam- 
boats made  their  appearance  on  the  Western  rivers. 
The  first  craft,  the  New  Orleans,  built  at  Pittsburg 
by  Fulton  at  a  cost  of  $40,000,  a  stern-wheeler  of 
between  300  and  400  tons,  put  out  for  New  Orleans. 
Others  followed,  but  none  proved  able  to  ascend  the 
river,  until  1815,  when  the  Enterprise,  a  stem-wheeler 
of  70  tons,  made  the  trip  from  New  Orleans  to  Cin- 
cinnati in  twenty-eight  days.  It  was  later  than  this, 
again,  that  steamships  came  gradually  to  ply  up  and 
down  the  coast. 


26 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


The  first  charter  for  canal  building  was  granted  to 
the  James  River  Company  by  the  legislature  of  Vir- 
ginia in  1 785.  Another  of  these  projects  was  the  Dis- 
mal Swamp  Canal,  begun  in  1 787,  under  a  joint  char- 
ter from  Virginia  and  North  Carolina,  and  opened 
in  1 794.  The  owners  of  its  stock  included  George 
Washington  and  Patrick  Henry,  and  it  was  origi- 
nally designed  to  facilitate  the  movement  of  lumber 
out  of  the  Dismal  Swamp.  The  Chesapeake  and 
Ohio  Canal,  the  Delaware  and  Chesapeake  Canal, 
and  the  Union  Canal,  of  Pennsylvania,  intended  to 
connect  the  Delaware  and  Susquehanna  rivers,  were 
only  forerunners  of  the  Erie  Canal,  363  miles  long, 
completed  in  1825.  A  canal  from  Lake  Champlain 
to  the  Hudson  River  was  completed  in  1823.  On 
the  opening  of  the  Erie  Canal  the  cost  of  freight 
fell,  according  to  its  class,  all  the  way  in  amount 
from  $15  to  $25  per  ton,  and  the  time  of  transit 
from  twenty  to  eight  days.  Wheat  was  worth  $33 
per  ton  in  western  New  York,  and  it  did  not  pay 
to  send  it  to  market,  down  the  Susquehanna  to  Bal- 
timore. The  canal  changed  all  that.  Indeed,  it 
has  been  said  that  the  Erie  Canal  added  $100,000,- 
ooo  in  value  to  the  farms  of  New  York  State.  It 
made  New  York  City  the  commercial  metropolis. 
Freight  which  had  gone  overland  from  Ohio  to 
Pittsburg  and  Philadelphia,  at  a  cost  of  $120  per 
ton,  now  went  to  New  York  by  way  of  the  lakes, 
the  great  canal,  and  the  Hudson.  The  opening  of 
the  Erie  Canal  excited  also  a  fever  of  enterprise  in 
canal  building  in  Ohio,  Pennsylvania,  Massachusetts, 
Maryland,  and  Virginia. 

The  first  voyagers  on  the  Great  Lakes,  La  Salle 
and  Hennepin,  set  sail  in  1678  in  a  schooner  of  ten 
tons,  which  they  had  launched  near  the  present  city 
of  Kingston,  Ontario.  From  the  mouth  of  the 
Niagara  River  they  continued  their  journey  by  land, 
and  in  the  following  May  launched  the  Griffin,  the 
first  sailing  vessel  to  navigate  the  upper  lakes.  In 
September  they  reached  their  destination  at  Green 
Bay.  From  1700  until  1756  the  construction  and 
navigation  of  sailing  vessels  on  the  lakes  was 
largely  confined  to  Lake  Ontario.  Then  the  Eng- 
lish began  to  build  and  sail  vessels  upon  Lake  Erie 
and  Lake  Ontario,  and  the  commerce  of  Lake 
Ontario  increased  so  fast,  that  in  1800  it  exceeded 
that  of  all  the  other  lakes  together.  The  first  Ameri- 
can vessel  to  sail  Lake  Erie  was  launched  at  Erie  in 
1798.  The  first  steam- vessel  that  navigated  the 
Lakes  was  built  at  Sackett's  Harbor  in  1817,  and 
measured  240  tons.  The  next  year  the  first  steam- 
boat above  Niagara  Falls  was  launched  at  Black 
Rock,  and  made  voyages  between  that  place  and 


Detroit.  The  schooner  Illinois,  100  tons,  was  the 
first  vessel  to  arrive  at  Chicago  from  the  lower  lakes. 
"This  event,"  writes  one,  "occurred  July  12,  1834, 
when  all  the  male  inhabitants  of  the  village,  amount- 
ing to  nearly  100,  assisted  in  dragging  the  craft  across 
the  bar." 

Gibson  and  Linn,  according  to  Ringwalt,  in  1776, 
descended  the  Ohio  and  the  Mississippi  from  Pitts- 
burg  to  New  Orleans,  and  brought  back  a  cargo  of 
136  kegs  of  gunpowder  for  the  use  of  the  continental 
army.  When  they  reached  the  falls  of  the  Ohio  River 
they  were  obliged  to  unload  their  boats  and  carry 
the  cargo  around  the  falls ;  but  the  success  of  their 
trip  gave  an  impetus  to  the  flatboat  trade  which  has 
continued  in  one  form  or  another  up  to  the  present 
time.  The  first  regular  packet  line  between  Pittsburg 
and  Cincinnati  was  established  in  1794,  and  con- 
sisted of  four  keel-boats  of  twenty  tons  each.  They 
were  much  like  the  modern  canal-boats,  and  could  be 
either  propelled  by  sails,  pushed  by  poles,  or  towed 
by  horses.  Freight  charges  were  high,  the  following 
rates  for  steamboats  on  the  Mississippi  having  been 
established  by  the  legislature  of  Louisiana  in  1812  : 
From  New  Orleans  to  Louisville,  four  and  one  half 
cents  per  pound  for  heavy  goods,  and  six  cents  for 
light,  averaging  five  cents  per  pound,  or  per  ton 
$112;  from  New  Orleans  to  Natchez,  three  quarters 
of  a  cent  per  pound,  or  $1.50  per  barrel;  and  the 
same  rate  for  all  intermediate  landings  from  New 
Orleans  to  Louisville.  Passage,  $125  for  the  full 
trip,  and  $30  to  Natchez.  Half-rates  were  allowed 
for  tonnage  going  down  the  river. 

Hon.  Levi  Woodbury,  who  made  a  trip  down  the 
Mississippi  in  1833,  says  :  "  At  every  village  we  find 
from  ten  to  twenty  flat-bottom  boats,  which,  besides 
corn  on  the  ear,  pork,  bacon,  flour,  whisky,  cattle 
and  fowls,  have  a  great  assortment  of  notions  from 
Cincinnati  and  elsewhere.  Among  these  are  corn 
brooms,  cabinet  furniture,  cider,  apples,  plows,  cord- 
age, etc.  They  remain  in  one  place  until  all  is  sold 
out,  if  the  demand  be  brisk ;  if  not,  they  move  farther 
down.  After  all  is  sold  out  they  dispose  of  their 
boat,  and  return  with  their  crews  by  the  steamers  to 
their  homes." 

By  1856,  however,  the  steam-tonnage  of  the  Mis- 
sissippi and  its  tributaries  equaled  the  steam-tonnage 
of  the  whole  of  Great  Britain.  Until  1850  the  boats 
measured  from  200  to  400  tons ;  but  the  builders  en- 
larged their  vessels  from  year  to  year,  until,  in  1878, 
they  attained  the  size  of  the  transatlantic  liners.  The 
steam-tonnage  of  the  inland  and  coast  lines  of  the 
United  States  increased  from  24,879  tons  in  1823 
to  1,172,372  tons  in  1876,  as  follows: 


ONE   HUNDRED   YEARS  OF   AMERICAN   COMMERCE 


INLAND   AND   COASTWISE   FLEETS,  1876. 


NUMBKR  OF 
VKSSELS. 


TONNAGE. 


Atlantic  and  Gulf  coasts 2,081  665,879 

1'ucific  coast 270  78,439 

Northern  lakes 921  201,742 

Western  rivers   1,048  226,312 


Total 4,320 


1,172-373 


In  1891  there  were  on  the  Great  Lakes  3700 
steam-  and  sail-vessels,  with  a  net  registered  tonnage 
of  1,250,000  tons.  In  that  year  they  carried  63,- 
250,000  tons  of  freight,  while  in  1890  the  ton-mile- 
age carried  by  this  fleet  was  18,849,348  ton-miles,  or 
24.7  per  cent,  of  the  ton  mileage  of  all  the  railroads 
of  the  United  States.  The  tonnage  of  the  lake 
marine  more  than  doubled  during  the  five  years 
from  1887  to  1892.  On  the  16,000  miles  of  the 
navigable  waters  of  the  Mississippi  River  and  its 
tributaries  there  were  afloat,  in  1890,  7445  crafts 
of  all  kinds,  with  a  registered  tonnage  of  3,400,000 
tons.  During  the  year  this  fleet  carried  30,000,000 
tons  of  freight  and  11,000,000  passengers.  The 
Hudson  River  had,  in  the  same  year,  a  traffic  of 
5,000,000  passengers  and  15,000,000  tons  of  freight, 
exclusive  of  3,500,000  tons  that  passed  through  the 
canals  of  New  York  by  way  of  the  Hudson  River 
to  tide-water.  The  total  for  these  four  divisions  of 
waterways  alone  was  111,750,000  tons.  The  Mis- 
sissippi Valley  rivers  furnish  transportation  facilities 
for  twenty-four  States,  embracing  an  area  of  1,240,- 
ooo  square  miles. 

The  average  freight  rate  on  wheat  from  Chicago 
to  New  York  in  1890  was  5.85  cents  per  bushel  by 
lake  and  canal,  and  14.31  cents  per  bushel  by  rail, 
the  water  cost  being  $1.94  per  ton,  and  the  rail  cost 
$4.77  per  ton.  The  Erie  Canal  is  only  a  little  over 
300  miles  long,  yet  Mr.  Albert  Fink  says  that  it  regu- 
lates the  freight  rates  of  all  the  railroads  east  of  the 
Mississippi  River,  not  only  on  those  whose  tracks  run 
parallel  with  the  canal,  but  upon  those  which  run  in 
the  opposite  direction. 

The  development  of  the  railway  system  of  the 
United  States  has  been  without  a  parallel.  Time 
and  distance  have  been  overcome,  and  the  products 
of  the  farmers,  the  lumbermen,  the  miners,  and  the 
artisans  now  reach  in  successful  competition  the 
markets  of  the  world.  The  railway  had  its  incep- 
tion less  than  seventy  years  ago  in  the  little  four-mile 
tramway  constructed  in  the  town  of  Quincy,  Mass., 
and  operated  by  horses.  The  first  really  important 
railway  was  the  Baltimore  and  Ohio,  fourteen  miles 
of  which  were  opened  in  1830.  In  the  same  year 
the  South  Carolina  Railway  was  begun  ;  in  1833  it 
was  completed  for  1 36  miles,  and  was  then  the  long- 


est railway  in  the  world.  It  was  also  the  first  rail- 
way to  carry  the  United  States  mails.  In  1834  the 
opening  of  the  Philadelphia  and  Columbia  Rail- 
road, as  part  of  the  system  of  internal  improve- 
ments of  Pennsylvania,  gave  that  State  a  continu- 
ous line  of  railways  and  canals  from  Philadelphia  to 
Pittsburg.  In  1835  the  Washington  branch  of  the 
Baltimore  and  Ohio  road  was  opened.  The  com- 
pletion of  the  Boston  and  Albany  road  in  1841,  and 
a  connecting-link  composing  the  line  from  Albany 
to  Buffalo  in  1842,  marked  the  opening  of  the  first 
great  railway  line.  The  real  beginning  of  interstate 
commerce  in  this  country  may  be  said  to  date  from 
this  time. 

The  total  railway  mileage  of  the  United  States  has 
now  reached  178,000  miles,  or  nearly  one  half  the 
railway  mileage  of  the  world.  The  total  mileage 
of  all  tracks  reaches  235,000  miles,  representing  a 
capital  of  nearly  $i  1,000,000,000 — an  amount  equal 
to  one  sixth  of  the  entire  wealth  of  the  country,  and 
five  times  greater  than  the  entire  circulating  currency 
of  the  United  States.  The  annual  earning  capacity 
of  this  capital  is  $1,200,000,000 — an  amount  more 
than  three  times  the  entire  annual  revenues  of  the 
government ;  and  it  operates  lines  having  an  annual 
traffic  of  over  600,000,000  passengers  and  745,000,- 
ooo  tons  of  freight.  An  idea  of  the  magnitude  of 
this  single  branch,  concerned  with  the  transporta- 
tion of  freight,  may  be  conveyed  when  it  is  stated 
that  745,000,000  tons  means  that  a  train  of  cars 
long  enough  to  reach  more  than  six  times  around  the 
earth  would  be  required  to  transport  it  all  at  a  single 
load.  The  average  distance  over  which  this  freight 
was  hauled  by  the  railroads  was  about  125  miles. 
Set  a  single  team  to  the  task,  and  it  would  take  it 
something  like  1,020,547  years  to  move  the  same 
amount  twenty-five  miles. 

The  total  number  of  tons  of  freight  carried  by  the 
steamers  and  sailing  vessels  of  the  rivers,  lakes,  and 
coastwise  transportation  routes  of  the  United  States 
in  1890  was  182,448,402 ;  the  tonnage  moved  by 
the  railways  in  the  same  year  was  more  than  three 
times  greater.  Suppose  that  there  had  been  no  in- 
crease since  1890  in  the  water  traffic,  and  add  to  this 
amount  the  freight  traffic  of  the  railways  during  the 
year  1893,  namely,  745,119,482  tons;  this  would 
make  the  total  average  tonnage  of  the  railways  and 
waterways  of  the  United  States  927,967,884.  It  is 
difficult  to  believe  that  the  railways  of  the  country 
moved  in  1893  more  than  eleven  tons  of  freight  for 
every  man,  woman,  and  child  within  the  boundaries 
of  the  United  States. 

As  late  as  1850  there  seems  to  have  been  little 


28 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


conception  of  the  influence  which  the  railways  were 
to  wield  in  the  development  of  the  interstate  traffic 
of  this  great  country,  and  of  the  country  itself.  It 
was  thought  that  they  could  not  successfully  compete 
with  waterways  and  canals,  except  where  a  speedy 
carriage  was  essential.  The  solution  of  the  problem 
of  cheap  transportation  from  Pittsburg,  for  example, 
was  not  reached  until  the  railroads  threatened  to 
take  away  all  traffic  from  the  traders ;  so  that  Pitts- 
burg  coal  can  now  be  delivered  in  New  Orleans  for 
about  $2.60  per  ton,  although  New  Orleans  is  2000 
miles  away  by  river.  Cow  Island,  on  the  upper 
Missouri,  is  4300  miles  from  Pittsburg ;  yet  coal  is 
carried  to  market  there,  a  distance  as  great  as  from 
New  York  to  the  Baltic  Sea.  Not  less  than  20,000 
miles  of  inland  navigable  waters  are  accessible  to 
these  Pennsylvania  coal  traders.  The  aggregate 
number  of  vessels  engaged  in  this  business  is  more 
than  4000,  and  of  the  13,000,000  tons  of  coal  that 
were  mined  in  1893  in  the  counties  near  Pittsburg 
about  4,500,000  tons  were  carried  to  market  by 
water.  Yet  let  me  illustrate  further  the  growth  of 
domestic  trade  in  a  part  of  our  country  which  was 
only  lately  as  remote  and  undeveloped  as  the  west- 
ernmost provinces  of  Brazil.  This  growth,  due  to 
the  transition  from  the  pony  express  to  the  trans- 
continental steam-car,  quickened  the  activities  of 
California  and  of  the  whole  Pacific  slope  like  the 
inspiration  of  a  new  life.  The  assessed  value  of  all 
property  within  California  rose  from  $260,563,886 
in  1869  to  $584,578,036  in  1879.  In  1889  ship- 
ments were  made  over  the  lines  of  the  Southern 
Pacific  system  of  1,140,596,010  pounds  from  San 
Francisco,  and  of  1,571,347,605  to  San  Francisco. 
The  probable  duration  of  an  overland  journey  from 
the  Missouri  River  to  California  before  the  conti- 
nental railways  were  constructed  was  about  no  days. 
It  took  Lewis  and  Clarke  two  years  and  a  half  to 
travel  from  the  Mississippi  to  the  mouth  of  the  Co- 
lumbia and  back. 

It  is  claimed  that  the  practically  unobstructed 
competition  which  has  prevailed  among  railways  has 
been  a  main  cause  of  many  consolidations  of  rail- 
way interests.  On  the  other  hand,  in  defense  of  con- 
solidation and  combination,  it  is  asserted  that  these 
result  in  better  and  swifter  service  and  lower  rates. 
Whatever  the  cause  or  causes,  rates  generally  are 
much  lower  than  they  were  ten  years  ago.  On 
June  30,  1894,  44  railways,  each  with  an  operated 
mileage  of  over  1000  miles,  out  of  a  total  of  1039 
operating  corporations,  controlled  and  operated  56.30 
per  cent,  of  the  total  railway  mileage  in  the  United 
States.  Extend  the  classification  to  include  all  roads 


operating  over  400  miles  of  line,  and  it  appears 
that  90  corporations  operate  72.90  per  cent,  of  our 
total  railway  mileage.  In  1837  the  superintendent 
of  motive  power  of  the  Columbia  and  Philadelphia 
Railroad  reported  that  the  following  charges  were 
imposed  on  the  railroads  named: 

FREIGHT  RATES  ON  RAILROADS  IN  1837. 


RAILROAD. 

Baltimore  and  Ohio 

Baltimore  and  Washington 
Winchester  and  Potomac . . 
Portsmouth  and  Roanoke  . , 

Boston  and  Providence 

Boston  and  Lowell 

Mohawk  and  Hudson 

Petersburg 


PER  TON  PER  MILE. 
CENTS. 


These  rates  seem  preposterous  when  compared 
with  the  .878  of  one  cent  per  ton  per  mile,  which 
was  the  average  charge  on  all  the  railroads  of  the 
United  States  during  the  year  1893. 

The  growth  of  lake  commerce  in  this  country  is 
something  marvelous.  The  increase  of  freight  ship- 
ments through  the  St.  Mary's  Canal,  both  east  and 
west  bound,  was  from  1,410,347  tons  in  1881  to 
8,888,759  tons  m  I%91>  or  an  advance  of  over  530 
per  cent.  There  was  an  increase  in  the  valuation 
of  this  tonnage  from  $28,965,612.92  to  $128,178,- 
208.51,  or  an  increase  of  over  340  per  cent.  During 
the  season  of  225  days  in  1891  in  which  this  canal 
was  open  there  passed  through  it  7339  steamers 
and  2405  sail-vessels — a  total  of  10,191  vessels, 
or  an  average  of  over  45  per  day  during  the  entire 
season.  The  total  registered  tonnage  for  the  season 
was  8,400,680.  The  freight  which  passed  through 
the  canal  was  carried  an  average  distance  of  about 
800  miles,  at  a  cost  per  mile  per  ton  of  1.35  mills. 
The  size  of  the  vessels  passing  through  the  canal  con- 
tinues to  increase.  The  average  registered  tonnage 
per  vessel  in  1867  was  626.3  tons,  while  in  1891  it 
was  962.1  tons.  This  freight-tonnage  during  the 
season  of  1889  amounted  to  19,717,860  tons.  The 
tonnage  passing  through  the  same  canal  during  the 
season  of  1890,  including  the  foreign  and  coastwise 
traffic,  amounted  to  21,888,472  tons,  while  the  ton- 
nage of  all  vessels  of  the  Atlantic  coast  engaged  in 
foreign  trade  during  1890  was  but  little  more — 22,- 
497,81 7  tons.  All  the  vessel-tonnage  engaged  in  the 
foreign  trade,  entering  and  clearing  at  London,  Eng- 
land, during  the  same  year  was  13,480,767  tons,  and 
at  Liverpool  the  same  year  it  was  10,941,800  tons; 
so  that  the  vessel-tonnage  passing  through  the  De- 
troit River  in  1890  was  more  than  8,000,000  more 
than  that  of  London,  about  double  that  of  Liver- 
pool, and  nearly  equal  to  that  of  the  two  combined. 


EDWARD   A.  MOSELEY. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


Another  comparison :  The  tonnage  passing  through 
the  Suez  Canal  in  1890  was  6,890,094  tons— less  than 
one  third  of  that  passing  through  the  Detroit  River. 
It  should  be  recalled,  too,  that  the  Detroit  River  was 
open  for  navigation  during  the  season  of  1890  only 
228  clays,  while  the  Suez  Canal  was  open  during  the 
entire  year.  Take  one  more  comparison :  The  total 
tonnage,  entrances  and  clearances,  of  the  foreign  and 
coastwise  trade  of  Chicago  and  Buffalo  for  the  sea- 
son of  1 890,  as  compared  with  that  of  the  four  great 
British  ports,  was  as  follows : 

TONS. 

Chicago 10,288,868 

Buffalo 9,560,590 

London 20,962,534 

Liverpool  16,621,421 

Glasgow 5.977.860 

Hull 5,061,882 

Carrying  the  comparison  still  further,  the  volume 
of  this  inland  trade  is  again  shown  in  the  figures 
giving  the  foreign  trade  of  the  following  great  com- 
mercial ports : 

TONS. 

New  York 12,646,555 

Hamburg 10,417,096 

Antwerp 8,203,999 

Marseilles 7>392>556 

Havre  4,418,876 

Bremen 3,481,769 

Boston   2,676,387 

Philadelphia 2,585,866 

San  Francisco 1,980,483 

It  will  be  seen  that  the  commerce  of  the  two  in- 
land cities,  Chicago  and  Buffalo,  consisting  almost 
wholly  of  a  coastwise  trade  within  the  confines  of 
the  Great  Lakes,  compares  most  favorably  with  the 
tonnage  movement  of  the  great  maritime  cities  of 
the  world. 

In  1859  the  average  freight  rate  by  lake  on  a 
bushel  of  corn  from  Chicago  to  Buffalo  was  15^ 
cents;  in  1871  the  rate  was  7^  cents  per  bushel. 
In  1857  the  average  rate  by  lake  and  canal  on  a 
bushel  of  wheat  from  Chicago  to  New  York  was 
25.29  cents;  in  1870  the  rate  for  the  same  service 
was  17.1  cents  per  bushel;  in  1880  it  was  12.27 
cents  per  bushel ;  and  in  1890,  5.85  cents  per  bushel. 
In  1870  the  average  rate  of  freight  by  rail  on  a 
bushel  of  wheat  from  Chicago  to  New  York  was 
33.3  cents;  in  1880  the  rate  was  19.9  cents;  and  in 
1890,  14.31  cents.  In  1867  the  average  rate  for 
carrying  iron  ore  from  Escanaba  to  Lake  Erie  was 
$4.25  per  ton;  in  1870  the  average  rate  was  $2.50 
per  ton;  in  1891  the  average  rate  was  82  cents  per 
ton ;  and  at  one  time  in  that  year  it  was  as  low  as 
55  cents  per  ton. 

The  benefit  of  these  great  reductions  in  lake  trans- 
portation rates  appears  very  forcibly  in  the  move- 


ments of  the  huge  cargoes  of  coal  that  are  sent  from 
ports  on  Lake  Erie  to  the  harbors  of  the  upper  lakes. 
In  1887  the  average  rate  per  ton  for  lake  transpor- 
tation of  coal  from  Buffalo  to  Chicago  was  $1.05; 
in  1891  the  average  rate  was  fifty  cents  per  ton ;  and 
from  November  10,  1891,  to  the  close  of  navigation, 
coal  was  carried  from  Buffalo  to  Duluth,  a  distance 
of  1000  miles,  for  ten  cents  per  ton.  Using  the 
common  unit  (cost  per  ton  per  mile)  for  compari- 
son, and  taking  the  official  report  of  the  movement 
of  freight  through  the  St.  Mary's  Falls  Canal,  the 
ton-mileage  rate  has  decreased  as  follows:  1887, 
2.3  mills;  1888,  1.5  mills;  1889,  1.5  mills;  1890, 
1.3  mills.  The  average  revenue  per  ton  of  freight 
per  mile  on  all  the  railroads  of  the  United  States  was 
given  at  9.4  mills  in  1890,  or  more  than  seven  times 
as  much  as  the  cost  of  freight  carriage  through  the 
St.  Mary's  Falls  Canal. 

The  regulation  of  interstate  commerce  before  the 
Declaration  of  Independence  was  by  Parliament. 
Under  the  Articles  of  Confederation  trade  was  con- 
trolled, where  it  was  controlled  at  all,  by  the  legisla- 
tures of  thirteen  distinct  sovereignties.  It  soon  be- 
came evident  that  the  several  States  would  not  unite 
in  any  general  or  fixed  rule  to  govern  commerce. 
Discriminations  naturally  followed,  which  resulted 
in  confusion  and  discord  among  the  different  parts 
of  the  confederacy.  Accordingly  one  of  the  reforms 
demanded  under  the  old  confederacy,  and  intro- 
duced in  the  Constitutional  Convention,  was  that 
"  Congress  shall  have  power  ...  to  regulate  com- 
merce .  .  .  among  the  several  States."  The  dis- 
satisfaction among  the  States  in  respect  to  the  inter- 
change of  trade,  and  the  urgent  demand  for  a  uniform 
and  general  principle  controlling  their  commerce, 
were  clearly  shown  in  the  debates  of  the  Constitu- 
tional Convention.  The  following  contemporane- 
ous opinions  are  of  interest : 

"The  want  of  authority  in  Congress,  under  the 
confederation,  to  regulate  commerce  had  produced 
in  foreign  nations,  particularly  Great  Britain,  a  mo- 
nopolizing policy  injurious  to  the  trade  of  the  United 
States.  .  .  .  The  same  want  of  a  general  power  over 
commerce  led  to  an  exercise  of  the  power,  sepa- 
rately, by  the  States,  which  not  only  proved  abortive, 
but  engendered  rival,  conflicting,  and  angry  regula- 
tions." (Madison  Papers,  vol.  v.,  p.  119.) 

"  The  oppression  of  the  uncommercial  States  was 
guarded  against  by  the  power  to  regulate  trade  be- 
tween the  States."  (Mr.  Sherman,  Deb.  on  Fed. 
Cons.,  Mad.  Pap.,  vol.  v.,  p.  434,  1787.) 

"  Mr.  Carroll  and  Mr.  L.  Martin  expressed  their 
apprehensions,  and  the  probable  apprehensions  of 


30 


ONE  HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


their  constituents,  that,  under  the  power  of  regulat- 
ing trade,  the  general  legislature  might  favor  the 
ports  of  particulai  States,  by  requiring  vessels  des- 
tined to  or  from  other  States  to  enter  thereat." 
(Ibid.,  p.  455.) 

To  cover  this  defect,  Art.  I.,  Sec.  9,  Cl.  6,  of  the 
Constitution  was  enacted,  to  wit :  "  No  preference 
shall  be  given  by  any  regulation  of  commerce  or  rev- 
enue to  the  ports  of  one  State  over  those  of  another, 
nor  shall  vessels  bound  to  or  from  one  State  be 
obliged  to  enter,  clear,  or  pay  duties  in  another." 

General  Washington,  in  a  letter  to  a  friend  on  the 
weakness  of  the  confederation,  and  pleading  for  a 
stronger  government,  wrote:  "We  have  abundant 
reason  to  be  convinced  that  the  spirit  of  trade 
which  pervades  these  States  is  not  to  be  repressed. 
It  behooves  us,  then,  to  establish  just  principles,  and 
this  cannot,  any  more  than  other  matters  of  national 
concern,  be  done  by  thirteen  heads  differently  con- 
structed and  organized.  The  necessity,  therefore, 
of  a  controlling  power  is  obvious,  and  why  it  should 
be  withheld  is  beyond  my  comprehension." 

Alexander  Hamilton,  in  the  "  Federalist,"  Letter 
VII.,  wrote :  "  The  competition  of  commerce  would 
be  another  fruitful  source  of  contention.  The  States 
less  favorably  circumstanced  would  be  desirous  of 
escaping  from  the  disadvantages  of  local  situation, 
and  of  sharing  in  the  advantages  of  their  more  for- 
tunate neighbors.  Each  State  or  separate  confed- 
eracy would  pursue  a  system  of  commercial  probity 
peculiar  to  itself.  This  would  occasion  distinctions, 
preferences,  and  exclusions  which  would  beget  dis- 
content. The  habits  of  intercourse  on  the  basis  of 
equal  privileges,  to  which  we  have  been  accustomed 
from  the  earliest  settlement  of  the  country,  would 
give  a  keener  edge  to  those  causes  of  discontent 
than  they  would  naturally  have,  independent  of  the 
circumstances."  Also,  in  Letter  XXII. :  "  The  inter- 
fering and  unneighborly  regulations  of  some  States, 
contrary  to  the  true  spirit  of  the  Union,  have,  in 
different  instances,  given  just  cause  of  umbrage  and 
complaint  to  others ;  and  it  is  to  be  feared  that  ex- 
amples of  this  nature,  if  not  restrained  by  a  national 
control,  would  be  multiplied  and  extended  till  they 
became  not  less  serious  sources  of  animosity  and  dis- 
cord than  injurious  impediments  to  the  intercourse 
between  the  different  parts  of  the  confederacy." 

In  the  debates  of  the  Constitutional  Convention 
the  clause  regulating  commerce,  etc.,  was  agreed  to 
nem.  con.,  not  even  a  yea-and-nay  vote  being  taken. 
When  the  grant  of  this  power  to  regulate  commerce 
among  the  States  was  made  by  the  Constitution, 
the  traffic  which  might  be  controlled  under  it  was 


quite  insignificant.  On  the  land  there  was  nothing 
that  could  approach  the  dignity  of  interstate  com- 
merce, and  its  regulation,  as  also  of  that  which  was 
exclusively  State  traffic,  was  for  the  most  part  left  to 
the  rules  of  the  common  law.  The  exceptional  regu- 
lations, if  any  seemed  to  be  called  for,  were  made 
by  the  State  laws.  For  the  regulation  of  commerce 
on  the  ocean  and  other  navigable  waters,  Congress 
very  promptly  passed  the  necessary  laws ;  but  its 
jurisdiction  within  the  limits  of  the  States  was  not 
very  clearly  understood,  and  it  was  not  until  the  cele- 
brated case  of  Gibbons  vs.  Ogden,  decided  in  1824, 
that  it  was  authoritatively  and  finally  determined 
that  the  waters  of  a  State,  when  they  constituted  a 
highway  for  foreign  and  interstate  commerce,  are,  so 
far  as  concerns  such  commerce,  as  much  within  the 
reach  of  Federal  legislation  as  are  the  high  seas,  and 
consequently  that  exclusive  right  for  their  navigation 
cannot  be  granted  by  States  whose  limits  embrace 
them.  But  while  providing  from  time  to  time  for 
the  regulation  of  commerce  by  water,  Congress  still 
abstained  from  undertaking  the  regulation  of  com- 
merce by  land.  The  reasons  were  the  same.  The 
land  commerce  was  insignificant,  and  the  rules  of  the 
common  law  were  in  general  found  adequate  for  the 
settlement  of  any  questions.  When  Congress  pro- 
vided for  the  construction  of  the  Cumberland  road, 
it  was  thought  undesirable  to  regulate  its  use  by 
national  law,  or  to  take  national  supervision  of  the 
commerce  upon  it ;  and  it  was  left  to  the  supervision 
and  care  of  the  States  through  or  into  which  the 
road  was  built.  With  the  application  of  steam  as  a 
motive  power  for  propelling  vessels,  conditions  were 
immediately  changed.  But  even  then  the  circum- 
stances were  favorable  to  a  prolongation  of  State  con- 
trol. The  first  improved  highways  were  turnpikes, 
the  next  in  grade  canals ;  but  the  highways  by  water, 
as  well  as  the  highways  by  land,  were  provided  for 
by  the  States.  It  was  not  unnatural  that  they  should 
be  left  in  charge  of  the  regulation  of  trade  upon 
them,  especially  as  no  complaint  was  made  that 
their  regulations  were  unjust,  or  that  they  discrimi- 
nated unfairly  as  against  the  citizens  or  the  business 
of  other  States.  When,  in  1830,  steam-power  began 
to  be  applied  to  the  propulsion  of  vehicles  upon  land, 
the  same  conditions  continued  to  prevail.  The  power 
of  the  Federal  government  in  the  regulation  of  com- 
merce between  the  States  was  put  forth  negatively 
rather  than  affirmatively ;  that  is  to  say,  it  was  put 
forth  in  restraint  of  excessive  State  power,  instead 
of  by  way  of  affirmative  national  regulation. 

1  See  First  Annual  Report  of  the  Interstate  Commerce 
Commission. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


31 


The  subject  of  the  management  of  railways  in  re- 
spect to  interstate  commerce  had  been  more  or  less 
discussed  in  Congress,  when  in  March,  1885,3  reso- 
lution was  adopted  by  the  United  States  Senate 
empowering  a  select  committee,  known  subsequently 
as  the  Cullom  Committee,  to  investigate  it.  On 
January  18,  1886,  this  committee  submitted  a  re- 
port based  upon  testimony  contained  in  more  than 
1450  printed  pages.  On  page  40  the  committee 
says :  "  Unjust  discrimination  is  the  chief  cause  of 
complaint  against  the  management  of  railroads  in  the 
conduct  of  business,  and  gives  rise  to  much  of  the 
pressure  upon  Congress  for  regulating  legislation." 

In  summing  up  the  testimony,  on  pages  180-182 
the  committee  says :  "  The  complaints  against  the 
railroad  systems  of  the  United  States  expressed  to 
the  committee  are  based  upon  the  following  charges : 
(i)  That  local  rates  are  unreasonably  high,  com- 
pared with  through  rates.  (2)  That  both  local  and 
through  rates  are  unreasonably  high  at  non-compet- 
ing points,  either  from  absence  of  competition  or  in 
consequence  of  pooling  agreements  that  restrict  its 
operation.  (3)  That  rates  are  established  without 
apparent  regard  to  the  actual  cost  of  the  service  per- 
formed, and  are  based  largely  upon  what  the  traffic 
will  bear.  (4)  That  unjustifiable  discriminations  are 
constantly  made  between  individuals  in  the  rates 
charged  for  like  service  under  similar  circumstances. 
(5)  That  improper  discriminations  are  made  between 
articles  of  freight  and  branches  of  business  of  a  like 
character,  and  between  different  quantities  of  the 
same  class  of  freight.  (6)  That  unreasonable  dis- 
criminations are  made  between  localities  similarly 
situated.  (7)  That  the  effect  of  the  prevailing  pol- 
icy of  railroad  management  is,  by  an  elaborate  sys- 
tem of  secret  special  rates,  rebates,  drawbacks,  and 
concessions,  to  foster  monopoly,  to  enrich  favored 
shippers,  and  to  prevent  free  competition  in  many 
lines  of  trade  in  which  the  item  of  transportation  is 
an  important  factor.  (8)  That  such  favoritism  and 
secrecy  introduce  an  element  of  uncertainty  into 
legitimate  business  that  greatly  retards  the  develop- 
ment of  our  industries  and  commerce.  (9)  That  the 
secret  cutting  of  rates,  and  the  sudden  fluctuations 
that  constantly  take  place,  are  demoralizing  to  all 
business  except  that  of  a  purely  speculative  charac- 
ter, and  frequently  occasion  great  injustice  and  heavy 
losses.  (10)  That  in  the  absence  of  national  and 
uniform  legislation  the  railroads  are  able,  by  vari- 
ous devices,  to  avoid  their  responsibility  as  carriers, 
especially  on  shipments  over  more  than  one  road, 
or  from  one  State  to  another,  and  that  shippers  find 
great  difficulty  in  recovering  damages  for  the  loss  of 


property  or  for  injury  thereto,  (i i)  That  railroads 
refuse  to  be  bound  by  their  own  contracts,  and  arbi- 
trarily collect  large  sums  in  the  shape  of  overcharges, 
in  addition  to  the  rates  agreed  upon  at  the  time  of 
shipment.  (12)  That  railroads  often  refuse  to  recog- 
nize or  be  responsible  for  the  acts  of  dishonest  agents 
acting  under  their  authority.  (13)  That  the  common 
law  fails  to  afford  a  remedy  for  such  grievances,  and 
that  in  case  of  dispute  the  shipper  is  compelled  to 
submit  to  the  decision  of  the  railroad  manager  or 
pool  commissioner,  or  run  the  risk  of  incurring  fur- 
ther losses  by  greater  discriminations.  (14)  That 
the  differences  in  the  classifications  in  use  in  vari- 
ous parts  of  the  country,  and  sometimes  for  ship- 
ment over  the  same  road  in  different  directions,  are 
a  fruitful  source  of  misunderstandings,  and  are  often 
made  a  means  of  extortion.  (15)  That  a  privileged 
class  is  created  by  the  granting  of  passes,  and  that 
the  cost  of  the  passenger  service  is  largely  increased 
by  the  extent  of  this  abuse.  (16)  That  the  capitali- 
zation and  bonded  indebtedness  of  the  roads  largely 
exceed  the  actual  cost  of  their  construction  or  their 
present  value,  and  that  unreasonable  rates  are  charged 
in  the  efforts  to  pay  dividends  on  watered  stock  and 
interest  on  bonds  improperly  issued.  (17)  That  rail- 
road corporations  have  improperly  engaged  in  lines 
of  business  entirely  distinct  from  that  of  transporta- 
tion, and  that  undue  advantages  have  been  afforded 
to  business  enterprises  in  which  railroad  officials  are 
interested.  (18)  That  the  management  of  the  rail- 
road business  is  extravagant  and  wasteful,  and  that  a 
needless  tax  is  imposed  upon  the  shipping  and  trav- 
eling public  by  the  unnecessary  expenditure  of  large 
sums  in  the  maintenance  of  a  costly  force  of  agents 
engaged  in  a  reckless  strife  for  competitive  business." 

The  report  of  Senator  Cullom's  Committee  formed 
the  basis  of  the  law  commonly  known  as  the  Inter- 
state Commerce  Act,  which  became  effective  April 
3,  1887.  The  Supreme  Court  in  the  case  of  the 
Union  Pacific  Railway  Company  against  Goodridge, 
October  term,  1892,  in  speaking  of  a  similar  act  of 
the  State  of  Colorado,  said :  "  This  act  was  intended 
to  apply  to  interstate  traffic  the  same  wholesome  rules 
and  regulations  which  Congress  two  years  thereafter 
applied  to  commerce  between  the  States,  and  to  cut 
up  by  the  roots  the  entire  system  of  rebates  and  dis- 
criminations in  favor  of  particular  localities,  special 
enterprises,  or  favored  corporations,  and  to  put  all 
shippers  on  an  absolute  equality." 

The  statute  recognizes  the  fact  that  it  is  no  proper 
business  for  a  common  carrier  to  foster  particular 
enterprises  or  to  build  up  new  industries ;  but,  deriv- 
ing its  franchise  from  the  legislature,  and  depending 


32 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


upon  the  will  of  the  people  for  its  very  existence,  it 
is  bound  to  deal  fairly  with  the  public,  to  extend  rea- 
sonable facilities  for  the  transportation  of  persons  and 
property,  and  to  put  all  its  patrons  upon  an  absolute 
equality.  The  laws  making  the  giving  of  transpor- 
tation privileges  a  criminal  offense  are  at  present 
difficult  of  enforcement.  Public  opinion  has  not 
yet  been  roused  to  the  energetic  condemnation 
which  is  necessary  to  make  these  special  favors  as 
completely  unknown  as  they  are  at  the  post-office 
window,  where  the  value  of  every  stamp  must  be 
paid. 

At  the  head  of  all  the  vast  machinery  employed 
in  moving  interstate  commerce  are  men  of  integrity, 
and  of  ability  rarely  developed  in  other  walks  of  life, 
broad-gauged  men,  to  whom  the  public  is  indebted 
for  the  efficiency  with  which  they  carry  on  their  stu- 
pendous enterprises.  Under  the  railway  presidents 
are  the  traffic  managers,  the  passenger  and  freight 
agents.  The  feeling  of  these  men  that  they  must 
serve  solely  the  corporations  which  employ  them 
has  grown  to  be  a  second  nature  with  them.  Their 
duty  to  the  government  and  to  the  public,  therefore, 
is  sometimes  obscured,  and  it  is  hard  for  them  to 
realize  that  many  practices  which  they  have  come 
to  regard  as  ordinary  business  methods  are  wrong. 
So  also  the  shipper  and  the  merchant  find  it  hard  to 
realize  that  the  push  and  barter  and  dicker  that  have 
made  them  successful  must  be  abandoned  when  they 
ship  their  merchandise ;  that  it  is  no  longer  to  be 
bargained  for,  and  cannot  be  carried  except  at  a 
rate  open  to  every  competitor. 

On  February  4,  1887,  the  Act  of  Congress  creat- 
ing the  Interstate  Commerce  Commission,  and  in- 
vesting it  with  authority  to  regulate  certain  matters 
with  respect  to  commerce  which  were  detrimental 
to  the  public  interest,  and  with  authority  to  require 
annual  reports  from  all  carriers  engaged  in  carrying 
interstate  commerce,  was  passed.  This  act,  being 
in  the  nature  of  experimental  legislation,  has  not 
accomplished  all  that  its  framers  hoped  or  intended, 
but  that  great  good  has  been  accomplished  cannot  be 
denied.  Various  defects  in  its  practical  application 
have  from  time  to  time  been  brought  to  the  atten- 
tion of  Congress,  and  amendments  to  remedy  some 
of  them  have  been  adopted.  The  statistics  compiled 
from  the  reports  required  under  the  provisions  of  this 
act  have  marked  a  new  era  in  railway  statistics  in  this 
country.  Being  compiled  from  sworn  reports  made 
up  on  a  uniform  plan  and  for  a  uniform  period,  in 
compliance  with  a  requirement  of  law,  and  published 
as  official  documents  of  the  government,  they  are 


accepted  as  authority,  and  eagerly  sought  after  by 
the  public  and  by  railway  officers. 

I  may  observe  in  closing  that  within  the  past  two 
or  three  years  the  courts  have  taken  advanced  ground 
in  asserting  the  power  of  the  Federal  government  over 
interstate  commerce.  It  was  held  by  the  Supreme 
Court  in  the  case  of  Debs  that  "  the  government  of 
the  United  States  is  one  having  jurisdiction  over 
every  foot  of  soil  within  its  territory,  and  acting 
directly  upon  each  citizen  ;  that  while  it  is  a  govern- 
ment of  enumerated  powers,  it  has  within  the  limits 
of  those  powers  all  the  attributes  of  sovereignty  ;  that 
to  it  is  committed  power  over  interstate  commerce 
and  the  transmission  of  the  mail ;  that  the  powers 
thus  conferred  upon  the  national  government  are  not 
dormant,  but  have  been  assumed  and  put  into  prac- 
tical exercise  by  the  legal  action  of  Congress  ;  that  in 
the  exercise  of  those  powers  it  is  competent  for  the 
nation  to  remove  all  obstructions  upon  highways, 
natural  or  artificial,  to  the  passage  of  interstate  com- 
merce or  the  carrying  of  the  mail;  that  while  it 
may  be  competent  for  the  government  (through  the 
executive  branch,  and  in  the  use  of  the  entire  execu- 
tive power  of  the  nation)  to  forcibly  remove  all  such 
obstructions,  it  is  equally  within  its  competency  to 
appeal  to  the  civil  courts  for  an  inquiry  and  deter- 
mination as  to  the  existence  and  character  of  any 
alleged  obstructions,  and  if  such  are  found  to  exist, 
or  threaten  to  occur,  to  invoke  the  powers  of  those 
courts  to  remove  or  restrain  such  obstructions."  In 
this  case  the  extent  and  nature  of  the  power  of  the-; 
Federal  government  over  interstate  commerce,  and 
the  methods  by  which  that  power  can  be  applied, 
were  discussed.  It  was  decided  that  the  United 
States  Circuit  Court,  sitting  as  a  court  of  equity, 
has  power  to  enjoin,  at  the  instance  of  the  Attorney- 
General  of  the  United  States,  acts  of  obstruction  to 
interstate  commerce,  notwithstanding  that  the  acts 
enjoined,  or  some  of  them,  might  amount  to  offenses 
against  the  criminal  law  of  the  United  States. 

While  it  is  clearly  the  fact  that,  under  our  form 
of  government,  the  national  authority  has  no  excuse 
for  interfering  with  the  relations  existing  between 
employer  and  employee  in  ordinary  business  transac- 
tions, it  is  maintained  by  many  that  as  the  govern- 
ment has  control  of  the  agencies  engaged  in  interstate 
commerce,  those  who  are  employed  by  such  agencies 
are  also  engaged  in  the  public  service,  and  for  that 
reason  an  obligation  exists  on  the  part  of  Congress  to 
enact  such  legislation  as  will  tend  to  settle  differences 
which  may  arise  between  railroads  and  their  em- 
ployees without  causing  inconvenience  to  the  public. 


A 


CHAPTER   V 

THE   POSTAL   SERVICE   IN   COMMERCE 


IT  is  something  more  than  a  mere  figure  of 
speech  to  call  the  post-office  the  right  hand 
of  commerce.  The  rapid  transmission  of 
news,  domestic  and  public,  has  been  of  enormous 
benefit  to  individuals  and  the  general  community, 
but  to  the  merchant  it  has  been  paramountly  one  of 
the  most  important  factors  in  successfully  carrying 
on  his  commercial  enterprises.  We  can  scarcely 
conceive  how  a  business  of  any  consequence  could 
ever  have  been  prosecuted  without  the  aid  of  this 
most  important  and,  I  am  happy  to  say,  best  appre- 
ciated branch  of  the  government  service.  To  tell 
the  story  of  the  post-office  in  commerce,  therefore, 
would  be  to  recite  the  history  of  the  service  itself, 
from  the  time  in  England,  in  1533,  when  the  few 
posts  that  were  established  were  for  the  exclusive 
use  of  the  sovereign,  down  to  the  present  day,  when 
the  letter  of  the  poorest  and  most  despised  person 
in  the  British  dominions  or  in  the  United  States  is 
treated  as  sacredly  and  handled  with  as  much  care 
as  though  it  were  written  by  the  Queen  of  England 
or  the  President  of  our  country.  Even  with  the 
generous  space  allotted  to  me  I  can  only  hope  to 
allude  briefly  to  the  most  important  episodes  in  the 
service,  whose  history  is  a  part  of  the  annals  of 
commercial  progress  throughout  the  world. 

At  the  beginning  of  the  seventeenth  century  there 
were  only  four  established  posts  in  the  British  do- 
minions— one  to  Ireland,  one  to  Scotland,  one  to 
Plymouth,  and  one  to  Dover,  the  last-named  being 
the  most  important  and  most  used,  because  it  passed 
through  the  county  of  Kent,  the  highroad  to  the 
Continent.  There  were  no  commercial  relations 
between  one  town  and  another,  but  the  foreign  trade 
was  considerable.  Many  foreigners,  on  account  of 
being  persecuted  in  their  native  countries,  had  been 
driven  to  London.  It  was  the  era  of  the  Flemish 
merchant,  who  introduced  the  manufacture  of 
woolen  cloth,  and  so  successfully  that  the  exports 
from  England  to  the  Netherlands  in  the  time  of 


Philip  II.  amounted  to  5,000,000  crowns  annually. 
These  Flemish  merchants  were  exceptionally  intel- 
ligent, and  nearly  all  the  peasants  they  employed 
were  able  to  read  and  write.  A  nice  little  quarrel 
arose  between  the  crown  and  the  foreign  merchants 
in  London.  The  latter  claimed  the  right  to  send 
their  letters  by  their  own  agents ;  the  crown  insisted 
that  all  communications  should  be  sent  through  the 
regular  channel.  This  feud  had  existed  for  many 
years.  A  proclamation  issued  in  1591  gave  the 
state  a  monopoly  of  carrying  letters  through  the 
county  of  Kent,  a  law  which  was  applied  to  all  the 
postal  routes  eighteen  years  later.  In  1 603  another 
proclamation  gave  to  those  who  furnished  horses  for 
the  post  carriers  the  exclusive  right  of  letting  horses 
to  travelers ;  but  the  foreign  merchants,  against 
whom  these  proclamations  were  directed,  still  per- 
sisted in  sending  their  letters  by  their  own  special 
messengers,  procuring  horses  from  other  quarters. 
Another  proclamation,  in  which  magistrates  were 
urged  to  see  that  horses  were  procured  at  the  post- 
houses  alone,  had  no  effect.  Under  Lord  Stanhope, 
the  master  of  the  posts  (what  we  should  call  the 
postmaster-general)  at  that  time,  there  was  a  for- 
eigner of  the  name  of  De  Quester,  who  was  superin- 
tendent of  the  foreign  post,  and  who  had  discharged 
his  duties  so  faithfully,  sending  the  government  des- 
patches with  such  promptness,  that  the  king,  in 
1619,  made  him  "Postmaster  of  England  for  For- 
eign Parts  out  of  the  King's  Dominions."  Doubt- 
less this  appointment  was  partly  intended  to  induce 
the  foreign  merchants  to  give  up  their  special  mes- 
sengers ;  but  it  not  only  failed  to  produce  that  effect, 
but  gave  dire  offense  to  Lord  Stanhope,  who  had 
letters  patent  to  his  office  which  declared  that  he 
had  charge  of  the  internal  parts  of  the  kingdom  and 
those  "beyond  the  seas  within  the  king's  domin- 
ions." In  this  way,  through  the  practice  of  the 
foreign  merchants  in  employing  special  messengers, 
a  serious  quarrel  was  brought  about  between  Lord 


33 


34 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


Stanhope,  De  Quester,  and  the  king,  which  was 
referred  to  the  Privy  Council  for  settlement.  The 
Council  finally  agreed  that  the  foreign  merchants 
(who,  by  the  way,  were  called  "  merchant  adventur- 
ers ")  were  "  to  have  a  post  of  their  owne  choice  " 
to  the  city  of  Hamburg  and  town  of  Delft,  "  where 
the  staples  of  cloth  are  now  fetched,  or  to  have  such 
other  place  or  places  whither  the  same  shall  happen 
to  be  removed."  This  action  superseded  De  Ques- 
ter's  appointment,  though  some  few  restrictions  were 
imposed  upon  the  merchants.  Stanhope  gained  a 
lawsuit  he  had  instituted  to  defend  his  rights,  and 
Billingsley,  a  broker  who  had  been  carrying  the  for- 
eign merchants'  letters,  was  sent  to  prison,  but  after- 
ward, on  petition  to  the  king,  released. 

From  the  earliest  days  of  the  English  post-office 
the  merchants  had  been  favored ;  their  bills  of  ex- 
change, invoices,  and  bills  of  lading,  when  written 
on  a  single  sheet  of  paper,  were  exempt  from  post- 
age. The  postmaster-general  contended  that  the 
exemption  applied  only  to  foreign  letters ;  the  mer- 
chants claimed  that  inland  letters  were  included; 
otherwise,  they  shrewdly  observed,  "letters  might 
go  cheaper  to  Constantinople  than  to  Bristol."  The 
result  of  the  controversy  was  that  the  merchants 
procured  an  act  to  be  passed  declaring  their  inter- 
pretation of  the  law  to  be  correct. 

When  Sir  Rowland  Hill,  the  father  of  penny 
postage,  was  making  his  brave  fight  for  postal  reform, 
he  was  glad  to  have  the  aid  of  a  committee  of 
London  merchants  to  collect  evidence  in  favor  of 
his  plans.  The  chairman  of  this  committee  was 
Mr.  Bates,  of  the  house  of  Baring  Brothers ;  and 
other  members  equally  prominent  were  obtained 
without  difficulty.  When  the  act  in  favor  of  penny 
postage  had  passed  the  House  of  Commons  the 
measure  had  to  come  before  the  House  of  Lords. 
The  ultraconservative  element  were  in  the  habit  of 
saying  in  those  days,  "  Thank  God,  there  's  a  House 
of  Lords!"  One  of  the  members  of  the  Mercantile 
Committee,  with  an  enterprise  that  would  be  com- 
mendable in  a  nineteenth-century  journalist,  sought 
to  "  interview  "  the  Duke  of  Marlborough,  who  was 
a  member  of  the  Upper  House,  thinking,  very 
properly,  that  if  some  expression  from  him  in  favor 
of  the  measure  could  be  obtained  before  it  came  up 
for  consideration  in  the  House  of  Lords,  it  would 
be  of  immense  advantage  to  the  postal  reformers. 
But  "  interviewing  "  was  not  in  vogue  in  that  day, 
and  the  noble  lords  were  unapproachable,  especially 
to  persons  who  had  "  views  "  about  reforming  any 
branch  of  the  English  government.  The  merchant, 
representing  the  committee,  wrote  to  the  duke  that 


they  would  like  to  see  him  and  present  their  reasons 
for  demanding  reform  in  postal  matters,  and  a  re- 
duction of  the  rate  to  a  penny.  The  duke's  reply, 
through  his  secretary,  was  that  "he  is  not  in  the 
habit  of  discussing  public  affairs  in  private,  and  he 
declines  to  receive  the  visits  of  deputations  or  indi- 
viduals for  the  purpose  of  such  discussions."  Row- 
land Hill  then  wrote  a  letter  to  his  Grace,  giving  his 
reasons  for  the  establishment  of  a  uniform  penny 
postage.  The  duke  never  answered  the  letter,  but 
when  the  debate  came  up  in  the  House  of  Lords  he 
supported  the  measure.  The  merchant  of  to-day 
will  smile,  as  I  suppose  the  merchants  of  that  day 
were  amused,  at  the  objection  of  one  noble  lord  to 
Rowland  Hill's  scheme.  He  argued  that,  under  the 
low  rate  of  postage,  the  amount  of  correspondence 
would  be  so  greatly  increased  that  "  the  whole  area 
on  which  the  post-office  stands  would  not  be  large 
enough  to  receive  the  clerks  and  the  letters."  The 
mind  of  many  an  English  official  or  statesman  be- 
comes peculiarly  dense  when  he  comes  face  to  face 
with  some  reformatory  measure  that  is  going  to 
make  things  easier  and  more  convenient  for  his  gov- 
ernment or  the  English  people.  Rowland  Hill  mildly 
observed  that  his  lordship  should  have  no  hesitation 
in  deciding  "  whether,  in  this  great  and  commercial 
country,  the  size  of  the  post-office  is  to  be  regulated 
by  the  amount  of  correspondence,  or  the  amount 
of  correspondence  by  the  size  of  the  post-office." 

In  the  early  history  of  the  post-office  in  America 
it  is  singular  that  our  colonies  were  considered  sec- 
ond in  importance  to  one  of  the  West  Indian  Islands. 
By  an  order  of  the  English  government  in  1688, 
after  prescribing  the  rates  of  postage  to  be  charged 
between  the  mother  country  and  Jamaica,  the  order 
reads:  "And  his  Majesty  is  also  pleased  to  order 
that  letter-offices  be  settled  in  such  other  of  his 
Majesty's  plantations  in  America  as  shall  be  found 
convenient  for  the  service  and  the  ease  and  benefit 
of  his  subjects."  Four  years  later,  in  1692,  Thomas 
Neale  obtained  a  grant  from  the  crown  authorizing 
him  to  "set  up  posts  in  North  America."  Neale 
never  left  England,  but  appointed  Andrew  Hamilton 
his  representative  in  this  country.  By  1698  a 
weekly  post,  running  over  700  miles  of  road,  had 
been  established  between  New  York  and  Boston, 
and  from  New  York  to  New  Castle  in  Pennsylvania. 
The  postage  on  a  letter  between  New  York  and 
Boston  was  a  shilling.  £20  a  year  was  paid  "to 
Mr.  Sharpus,  that  keeps  the  letter-office  at  New 
York,"  who  earned  ^170  in  addition  for  carrying 
the  mail  half-way  to  Boston,  and  the  mail  from 
New  York  to  Philadelphia.  A  salary  of  ^10  was 


ONE   HUNDRED   YEARS  OF   AMERICAN   COMMERCE 


"  allowed  to  him  that  keeps  the  letter-office  at  Phil- 
adelphia," and  an  allowance  of^ioo  to  the  deputy 
postmaster  of  Virginia  and  Maryland. 

The  receipts  from  the  service  increased  each  year. 
In  1693  the  receipts  of  the  New  York  office  were 
£61;  in  1695,  £9,2;  in  1696,  ^93;  in  1697, 
;£«22.  The  "Boston,  Road  Island,  Connecticut, 
and  Piscataway  posts "  produced  from  .£148  the 
first  two  years  10^298  in  the  fourth.  The  post  to 
Philadelphia  kept  improving,  but  the  Virginia  and 
Maryland  routes  never  yielded  anything;  in  fact, 
were  run  at  a  loss  of  ^600,  the  correspondence  not 
exceeding  i  oo  letters  a  year.  The  whole  system  did 
not  pay  expenses,  and  in  1697  Neale  was  .£2360 
out  of  pocket.  The  great  question  was  then,  as  it 
has  been  even  in  later  years,  "  How  can  the  postal 
service  be  made  self-supporting?  "  Hamilton  pro- 
posed that  the  rates  should  be  raised,  that  the  post 
carriers  should  go  "  ferry  free,"  and  that  ship-cap- 
tains (after  a  regular  postal  rate  had  been  settled 
between  England  and  America)  on  both  sides  of  the 
Atlantic  should  be  required  to  take  the  mail  they 
had,  at  once,  to  the  post-office  of  the  port  at  which 
they  first  touched.  Under  the  new  rate,  the  charge, 
where  the  distance  was  not  more  than  eighty  miles 
from  New  York,  was  sixpence ;  to  and  from  Boston, 
twelvepence ;  to  and  from  Boston  and  Annapolis, 
Md.,  thirty-six  pence ;  "  to  and  from  New  York  and 
James  Towne,  380  miles,  and  many  broad  and 
dangerous  bays  and  rivers  to  be  ferryed  over,"  thirty 
pence.  The  English  government,  according  to  its 
own  home  officials,  had  not  supported  the  postal 
service  in  the  colonies  as  it  should  have  done,  the 
extent  of  its  interest  showing  itself  in  an  annual 
appropriation  of  ^50,  in  consideration  of  which  the 
government  letters  were  to  be  carried  free.  Its 
own  postmasters-general,  about  this  period,  admitted 
that  the  posts  in  private  hands  could  not  prosper  for 
want  of  due  encouragement,  and  they  recommended 
that  the  service  should  be  carried  on  by  the  govern- 
ment. Neale's  offer  to  sell  his  patent  for  ^5000, 
or  ^1000  a  year  for  life,  or  for  the  unexpired  term 
of  the  grant  (about  sixteen  years),  was  not  accepted 
by  the  government.  He  died  in  debt,  his  interest 
in  the  posts  having  been  transferred  to  Hamilton, 
who  died  in  1703,  when  his  widow  took  charge  of 
the  business  for  three  or  four  years,  and  in  1707  the 
posts  became  vested  in  the  crown.  In  1722  the 
posts  began  to  be  self-supporting.  In  August  of 
that  year  the  postmaster-general  wrote :  "  We  have 
now  put  the  post-office  in  North  America  and  the 
West  Indies  upon  such  a  foot  that  for  the  future,  if 
it  produce  no  profit  to  the  revenue,  it  will  no  longer 


be  a  charge  to  it ;  but  we  have  good  reason  to  hope 
there  will  be  some  return  rather  from  thence." 

In  these  early  days,  when  there  was  a  monthly 
service  between  Boston  and  New  York,  the  post- 
office  in  the  metropolis  was  a  locked  box  that  stood 
in  the  office  of  the  secretary  of  the  colony.  It  took 
four  weeks,  in  those  times,  to  accumulate  a  post- 
rider's  mail,  even  with  the  "  small  portable  goods  " 
that  were  allowed  to  be  carried  in  that  way.  Later 
on,  in  1775,  after  the  time  of  Benjamin  Franklin, 
the  first  postal  reformer,  who  established  the  penny 
post,  made  newspapers  pay,  quickened  the  pace  of 
the  riders,  advertised  letters,  etc.,  the  New  York 
post-office  was  located  in  a  printing-house  in  Water 
Street.  Ebenezer  Hazard,  a  bookseller,  was  the 
postmaster,  and  William  Goddard,  an  enterprising 
journalist  and  printer  of  New  York  (born  in  New 
London,  Conn.),  had  charge  of  the  route  to  Phila- 
delphia, Mr.  Hazard  managing  the  route  to  Boston. 
This  latter  route  will  be  remembered  for  notable 
exploits  in  the  way  of  post  riding,  including  the  ride 
of  Paul  Revere,  who  in  1773  rode  from  Boston  to 
New  York,  and  thence  to  Philadelphia,  with  the 
news  of  the  "  Boston  tea-party  "  ;  that  of  Ebenezer 
Hurd,  who  was  in  the  service  forty-eight  years, 
traveling  over  as  much  space  as  twelve  and  one  half 
times  around  the  world,  or  as  far  as  the  moon  and 
half-way  back ;  and  the  most  famous  ride  of  Paul 
Revere  in  1775,  when  he  proclaimed  the  intended 
movement  of  the  British  army  to  Lexington  and 
aroused  the  people  to  arms. 

The  development  of  the  ocean  postal  service 
presents  interesting  phases.  In  the  days  of  New 
Amsterdam  the  whole  colony  looked  upon  the 
arrival  of  a  ship  as  the  most  important  event  of  the 
day.  It  was  of  special  interest  to  the  merchants, 
whose  correspondence  was  first  delivered  to  them, 
after  which  the  letters  for  the  general  public  were 
distributed,  the  crowd  always  being  down  at  the 
dock  waiting  to  receive  their  mail.  The  masters  of 
ships  sailing  to  and  from  America  in  those  days  un- 
consciously instituted  what  the  well-known  reformer, 
Mr.  J.  Henniker  Heaton,  of  England,  is  striving  to 
bring  about  in  the  present  day— ocean  penny  post- 
age ;  that  is  to  say,  correspondents  would  drop  let- 
ters in  a  coffee-bag  hung  up  in  one  of  the  coffee- 
houses that  were  so  common  then  on  both  sides  of 
the  water,  and  the  masters  of  the  vessels  would  call 
for  the  mail  just  before  sailing,  and  deliver  the  let- 
ters at  the  port  of  destination,  charging  one  penny 
for  a  single  letter  and  twopence  for  a  double  one. 

When  Thomas  Neale  (already  mentioned  in  this 
article)  failed  to  make  the  inland  post  pay  in  the 


36 


ONE  HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


colonies,  he  proposed  to  establish  sea  rates  of  post- 
age. Letters  would  then  be  in  charge  of  the  post- 
office,  and  the  shipmaster,  as  its  agent,  would  hand 
them  over  to  a  postal  official  on  arriving  in  port. 
Correspondence,  it  was  argued,  that  was  being 
delivered  by  private  hand,  under  the  new  system 
would  have  to  pass  through  the  posts  and  pay  regu- 
lar rates,  which  should  be  sixpence  for  a  single  let- 
ter, one  shilling  for  a  double  letter,  and  one  shilling 
sixpence  for  a  packet.  The  English  postal  author- 
ities of  that  day  were  wiser  than  those  of  the  time 
of  Rowland  Hill,  for  they  answered  that  the  way  to 
increase  the  revenue  of  the  post-office  was  to  "  make 
the  intercourse  of  letters  easy  to  people."  Rowland 
Hill,  one  hundred  and  fifty-nine  years  later,  had  to 
struggle  long  and  hard  to  convince  the  post-office 
department  of  the  truth  of  this  proposition,  while 
the  postmasters-general  in  the  time  of  Neale  wrote : 
"  The  easy  and  cheap  corresponding  doth  encourage 
people  to  write  letters,"  and  declared  that  the  postal 
revenue  had  been  increased  when  the  rate,  before  this 
time,  had  been  reduced  from  sixpence  to  threepence. 

The  system  of  the  coffee-house  delivery  of  letters 
was  used  by  the  residents  of  "  Breucklyn,  Pavonia, 
and  Hackensack,"  who  left  their  mail  at  some  well- 
known  tavern  previously  agreed  upon.  This  custom 
was  followed  until  after  the  English  took  possession 
of  New  York.  The  best-known  coffee-houses  in  New 
York  were  the  Exchange  Coffee-House,  located  at 
the  foot  of  Broad  Street,  and  the  Merchants',  located 
on  the  southeast  corner  of  Wall  and  Water  streets. 

After  the  War  of  1812  the  mails  were  carried  by 
the  packet  service,  which  had  been  rapidly  devel- 
oped, owing  to  the  increased  trade  between  America 
and  Europe.  Frequent  trips  were  made,  and  the 
facilities  for  foreign  correspondence  were  much  bet- 
ter than  they  had  been.  Then,  from  1840  to  1855, 
came  the  era  of  the  clipper-ships,  which  were  built 
with  special  reference  to  speed,  and  whose  services 
were  quickly  utilized  by  the  American  newspapers, 
the  best  representatives  of  our  national  spirit  of 
enterprise.  One  of  these  clipper-ships,  in  1846  (the 
Toronto,  of  the  Morgan  Line),  beat  the  Cunard 
steamer  from  Liverpool,  bringing  a  copy  of  the 
London  "  Times,"  containing  European  intelligence, 
forty-two  days  later  than  the  last  paper  received. 
The  New  York  "  Herald  "  secured  this  prize,  and 
published  an  "  extra  "  about  it  the  same  afternoon. 

In  1845  Congress  authorized  the  postmaster- 
general  to  make  contracts  for  the  transportation  of 
the  foreign  mails,  which  had  now  become  an  impor- 
tant feature  of  the  postal  service.  After  the  ocean 
mail  service  had  become  fairly  started  it  was  im- 


proved rapidly.  Various  suggestions  have  been 
made  from  time  to  time  as  to  granting  subsidies  for 
this  service.  My  own  opinion  is  that  the  ships 
should  receive  proper  compensation  for  carrying  the 
mails,  on  the  same  plan  that  we  pay  the  railroads, 
or  should  do  the  work  under  contract  for  specified 
distances.  The  amount  of  foreign  mail  carried  has 
increased  enormously.  In  1840,  when  the  Great 
Western  brought  it  over,  the  British  mail  amounted 
to  two  sacks ;  at  the  present  time  it  amounts  to  five 
or  six  truck-loads.  Over  100,000  letters  are  now 
despatched  from  New  York  every  sailing-day,  and 
nearly  the  same  number  are  received.  The  next 
great  step  in  perfecting  this  branch  of  the  service 
will  be  universal  international  penny  postage.  To 
bring  about  this  change,  Mr.  J.  Henniker  Heaton, 
M.P.  from  Canterbury,  has  been  and  is  working 
with  the  same  intelligence  and  persistency  that 
characterized  Rowland  Hill ;  and  eventually,  I  hope 
and  believe,  he  will  meet  with  the  same  success. 

The  growth  of  the  railway  mail  service  is  another 
most  important  feature  in  the  history  of  the  postal 
service.  The  railroad  was  first  used  as  a  post-office 
in  England  in  1837,  between  Liverpool  and  Bir- 
mingham. On  the  completion  of  the  railroad  line 
the  following  year  what  was  called  the  "  flying  mail " 
train  was  started  from  the  British  metropolis  to 
Birmingham.  In  1834  the  mails  were  being  con- 
veyed in  the  United  States  over  seventy-eight  miles 
of  railroad,  being  carried  in  closed  bags.  In  1860 
Postmaster-General  Holt  arranged  to  run  a  mail- 
train  between  New  York  and  Boston,  via  Hartford 
and  Springfield,  with  the  idea  of  forwarding  East 
the  Southern  mail  more  promptly,  instead  of  allow- 
ing it,  as  the  practice  had  been,  to  remain  over  a 
day  in  New  York.  The  following  year  a  railroad 
mail  was  established  between  New  York  and  Wash- 
ington. In  1863  it  was  suggested  that  "post-office 
cars"  could  be  placed  on  the  principal  railroad 
lines,  and  that  clerks  could  sort  the  mail  for  the 
terminal  points  and  intervening  stations  while  the 
cars  were  in  transit.  A  test  of  this  system  was 
made  in  1864,  under  the  direction  of  the  postmaster- 
general,  by  Colonel  George  B.  Armstrong,  at  that 
time  assistant  postmaster  at  Chicago.  The  test  was 
made  between  Chicago  and  Clinton,  la.,  August 
28,  1864.  There  were  then  no  pigeonhole  cases  for 
letters,  nor  such  conveniences  for  handling  the  mails 
as  now  exist.  Under  the  system  then  in  vogue  they 
were  not  necessary ;  for  postmasters  were  required 
to  post-bill  all  letters,  paid  and  unpaid,  wrap  them 
in  paper,  those  for  each  post-office  in  the  State  being 
done  up  separately,  and  write  the  name  of  the  post- 


THOMAS  L.  JAMES. 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


37 


office  of  destination  on  the  package.  Those  for 
other  States  were  massed  together,  wrapped  up,  and 
addressed  to  the  nearest  distributing  post-office. 

In  1864  a  successful  experiment  of  the  same  kind 
was  made  on  the  route  between  New  York  and 
Washington,  expert  clerks  from  the  principal  East- 
ern cities  being  selected  for  the  work,  which,  it  may 
be  said,  has  been  always  exceptionally  well  done. 
Even  as  far  back  as  1863  a  convention  of  special 
agents  reported  of  the  employees :  "  The  amount  of 
labor  they  perform  and  the  degree  of  intelligence 
exhibited  can  hardly  be  estimated  outside  the 
department." 

In  1865,  in  quick  succession,  postal  cars  were 
placed  on  the  lines  between  Chicago  and  Daven- 
port, la.,  Chicago  and  Dunleith,  111. ;  and  the 
Chicago- Burlington  and  Galesburg-Quincy  lines 
were  established.  The  first  railway  postal  service 
was  put  on  the  Philadelphia- Pittsburg  route,  on  all 
the  principal  railroad  lines  leading  out  of  Chicago, 
and  on  the  Hudson  River  and  New  York  Central 
railroads,  between  New  York,  Albany,  and  Buffalo. 
The  new  system  made  more  rapid  progress  in  the 
West  than  in  the  East,  the  New  York  and  Washing- 
ton and  the  New  York  and  Albany-Buffalo  being  for 
a  long  time  the  only  postal-car  routes.  But  the  suc- 
cess of  the  service  in  the  West  led  to  its  extension 
not  only  in  the  Eastern  States,  but  over  the  whole 
country,  so  that  by  1872  there  were  railway  post- 
offices  on  fifty-seven  lines  of  road. 

Another  improvement  that  marks  the  progress  of 
the  postal  service  was  the  change  in  the  rate  of  post- 
age in  1851.  Before  that  year  the  rate  was  five 
cents  per  half-ounce  for  a  distance  not  exceeding  300 
miles,  and  ten  cents  exceeding  that  distance.  In  the 
year  mentioned  the  rate  was  changed  to  three  cents 
per  half-ounce  for  a  distance  not  exceeding  3000 
miles,  and  ten  cents  exceeding  that  distance.  The 
use  of  adhesive  stamps  was  authorized  in  1847  and 
made  compulsory  in  1856.  In  1863  the  distance 
limit  for  carrying  a  letter  was  removed.  In  the 
same  year  the  free-delivery  or  carrier  system  was 
established  in  49  cities.  In  1895  the  carrier  service 
is  in  use  in  610  cities.  There  are  about  12,000 
carriers  employed,  at  an  annual  cost  of  about  $n,- 
323,000.  There  are  twice  the  number  of  carriers 
now  employed  in  Chicago  than  were  in  the  service 
throughout  the  entire  country  in  1864. 

In  1854  the  registry  system  was  established,  which 
is  certainly  one  of  the  greatest  conveniences  the 
commercial  world  possesses.  It  took  five  years  to 


improve  it  and  bring  it  into  general  use.  The 
safety  of  the  system  is  illustrated  by  the  fact  that 
the  losses  by  fire,  accident,  and  theft  amount  to  but 
one  in  every  16,306  pieces.  About  15,000,000 
pieces  of  all  classes  of  matter  are  registered  in  a 
year.  In  1864  the  money-order  system  was  estab- 
lished. Within  the  first  six  months  419  offices  were 
made  money-order  offices;  now  there  are  nearly 
20,000  such  offices. 

Business  men,  more  especially  publishers,  will  re- 
call the  law  of  1875  which  enabled  them  to  mail 
newspapers  and  periodicals  at  the  rate  of  two  cents 
per  pound.  Ten  years  later  this  law  was  amended 
so  as  to  make  the  rate  one  cent  per  pound.  In 
making  this  change  the  government  showed  that  it 
recognized  the  newspaper  and  the  periodical  as 
educators.  Although  this  wise  provision  has  been 
abused  to  such  an  extent  as  to  make  it  largely 
responsible  for  the  postal  deficiency,  it  is  safe  to  say 
that  the  law  can  be  so  amended  in  the  future  as  to 
stop  the  abuses  complained  of,  and  at  the  same  time 
preserve  the  undoubted  advantages  which,  by  its 
operation,  are  conferred  upon  the  people. 

In  the  extent  of  its  work  and  the  manner  in  which 
the  service  is  performed  it  is  safe  to  say  that  the 
postal  department  in  this  country  cannot  be  excelled 
by  any  other  in  the  world.  A  late  English  writer 
(Mr.  Herbert  Joyce,  of  the  London  post-office)  has 
this  to  say :  "  American  progress  has  long  been  the 
wonder  of  the  world,  and  in  nothing,  perhaps,  has 
it  displayed  itself  more  remarkably  than  in  the  mat- 
ter of  the  posts.  The  figures  which  the  United 
States  post-office  presents  to  us  year  after  year — fig- 
ures as  compared  with  which  even  those  of  the  post- 
office  of  Great  Britain  fall  into  insignificance — make 
it  difficult  to  believe  that  only  two  hundred  years 
ago  an  enterprising  Englishman  [Thomas  Neale] 
was  struggling  to  erect  a  post  between  New  York 
and  Boston." 

The  United  States  spends  more  money  on  its 
postal  service  than  any  other  nation,  the  expendi- 
tures in  1874  amounting  to  $84,000,000,  while 
Germany,  the  next  in  postal  rank,  expended  less 
than  $64,000,000,  and  Great  Britain  less  than  $37,- 
000,000.  The  United  States  is  ahead  of  the  other 
countries  in  annual  transportation  on  railroads  and 
other  roads,  the  miles  of  service  in  1894  being  264,- 
717,595  ;  and  in  Germany,  next  in  rank,  112,480,- 
758.  Our  postal  service  gives  employment  to 
about  180,000  persons ;  that  of  Germany  to  155,000 ; 
and  that  of  Great  Britain  to  131,000. 


CHAPTER   VI 

OUR   MERCHANT    MARINE 


EASTWARD  for  3000  miles  of  the  group  of 
fifteen  States  along  the  fringe  of  the  sea 
from  Massachusetts  to  Georgia,  which  Jay's 
treaty  gave  a  recognized  place  among  the  mari- 
time and  commercial  powers  of  the  world,  stretched 
the  barren  Atlantic;  for  3000  miles  to  the  west 
stretched  forest,  plain,  prairie,  mountain,  and  lake, 
storing  a  wealth  the  extent  of  which  no  man  of 
that  time,  even  in  the  most  extravagant  burst  of  en- 
thusiastic prophecy,  was  to  conjecture,  and  the  de- 
velopment of  which  has  been  the  marvel  of  man's 
industrial  progress.  If  our  merchant  marine  has 
lagged  far  behind  our  other  national  industries ;  if, 
for  the  time,  it  has  been  outstripped  by  competitors, 
while  American  manufacture  and  agriculture  have 
pushed  themselves  into  the  front  rank,  it  must  be 
borne  in  mind  that  illimitable  natural  resources, 
roughly  to  be  gauged  by  the  creation  into  new  States 
of  over  2,000,000  square  miles  of  territory,  and  by 
an  increase  of  upward  of  60,000,000  in  population 
during  the  century,  have  stood  behind  the  latter. 
The  American  merchant  marine,  on  the  other  hand, 
in  the  unrestricted  rivalry  of  nations, — which,  from 
the  nature  of  the  element,  must  obtain  upon  the  high 
seas, — for  forty  years  has  been  hampered  by  the  re- 
tarded use  of  modern  materials  of  construction,  and 
by  restrictions  forbidding  it  to  enter  that  rivalry  on 
even  terms  with  competing  nations,  which  have 
sought  out  and  applied  every  device  to  promote 
their  own  navigation. 

The  record  of  the  American  merchant  marine 
from  1795  to  the  present  day  may  be  divided  into 
two  periods.  The  first,  covering  two  thirds  of  the 
century  after  the  promulgation  of  Jay's  treaty,  was 
a  period  of  growth,  culminating  in  the  possession  of 
the  largest  tonnage  which  up  to  that  time  had  ever 
borne  the  flag  of  any  nation  but  one,  and  in  the 
attainment  by  the  United  States  of  a  rank  on  the 
ocean  second  only  to  that  of  Great  Britain  and  all 
her  colonies  combined,  with  the  promise  that  before 


many  years  our  sea  power  would  be  unsurpassed. 
At  the  end  of  the  second  period  the  total  tonnage 
of  our  great  rival  surpasses  ours  three  to  one,  and 
on  the  ocean  nine  to  one.  We  hold  by  uncertain 
tenure  third  rank  as  a  mercantile  power  on  the  sea ; 
and  of  the  hundreds  of  steamships  under  every  flag 
crossing  the  Atlantic  and  the  Pacific  from  our  shores 
to  the  Old  World,  only  fifteen  fly  the  Stars  and  Stripes. 
The  dividing-line  in  time  between  these  strongly 
contrasting  periods  was  vaguely  within  the  decade 
from  1855  to  1865.  The  forces  which  during  this 
interval  turned  our  maritime  progress  into  retrogres- 
sion, in  the  order  of  their  ultimate  importance,  were 
the  substitution  of  iron  for  wood  as  the  chief  mate- 
rial of  marine  construction,  the  diversion  of  the 
nation's  energies  from  the  sea  to  internal  develop- 
ment, and  the  losses  inflicted  upon  our  mercantile 
marine  by  the  Civil  War.  Even  these  causes  would 
not  have  sufficed  to  produce  such  destructive  results 
had  not  the  inadequacy  of  our  laws,  compared  with 
the  laws  of  rival  nations,  intensified  their  operations. 
Wherein  lies  that  inadequacy  and  how  it  may  be 
remedied  are  questions  which  unfortunately  are  mat- 
ters of  partizan  dispute.  They  cannot,  accordingly, 
be  discussed  within  the  limitations  necessarily  placed 
upon  this  volume. 

On  December  31,  1789,  the  merchant  fleet  of  the 
United  States  amounted  to  201,562  tons,  of  which 
123,893  tons  were  registered  for  the  foreign  trade, 
68,607  tons  enrolled  for  the  coasting  trade,  and  the 
remainder  engaged  in  the  fisheries.  In  May,  1789, 
James  Madison,  in  the  House  of  Representatives, 
stated  that  the  tonnage  entered  in  Massachusetts, 
New  York,  Pennsylvania,  Maryland,  Virginia,  South 
Carolina,  and  Georgia  amounted  to  437,641  tons 
(including  repeated  voyages),  of  which  only  160,907 
tons  were  foreign.  "  This  circumstance,"  said  Mr. 
Madison,  "annexed  to  our  capacity  of  increasing 
the  quantity  of  our  tonnage,  gives  us  a  favorable 
presage  of  our  future  independence."  By  1795  the 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


tonnage  of  our  merchant  fleet  had  increased  to  747,- 
965  tons,  and  in  1820,  in  spite  of  the  oppressive 
influence  of  the  Embargo  acts,  to  1,280,167  tons, 
583,657  tons  of  which  were  in  foreign  trade,  com- 
pared with  a  tonnage  for  the  entire  British  empire 
of  2,648,593  tons.  Three  years  later  the  American 
tonnage  (counting  repeated  voyages)  entering  the 
United  States  from  foreign  ports  amounted  to  810,- 
761  tons,  compared  with  119,487  foreign,  of  which 
89,553  tons  were  British. 

At  the  outset  the  efforts  of  the  United  States  to 
engage  in  the  carrying  trade  were  met  by  discrimi- 
nating duties  imposed  by  our  older  rivals  on  Ameri- 
can vessels.  Sharp  retaliation,  begun  by  the  first 
Congress  and  consistently  followed  up,  forced  nation 
after  nation  to  withdraw  from  this  mode  of  warfare 
upon  our  commercial  life,  and  led  to  a  series  of 
treaties  of  friendship,  navigation,  and  commerce, 
which  are  the  basis  of  our  trade  relations  with  the 
world.  By  these  treaties,  associated  with  illustrious 
presidents,  and  negotiated,  as  secretaries  of  state  and 
ministers,  by  Albert  Gallatin,  John  Quincy  Adams, 
Henry  Clay,  Martin  Van  Buren,  Daniel  Webster, 
James  Buchanan,  Hamilton  Fish,  Thomas  F.  Bay- 
ard, and  others,  the  United  States  obtained  for  their 
vessels  in  the  ports  of  nearly  every  civilized  nation 
equal  treatment  with  that  accorded  to  the  vessels  of 
the  nation  itself,  and  in  return  granted  to  foreign 
vessels  in  our  ports  the  same  treatment  which  we 
accord  to  American  vessels.  The  negotiation  of 
these  treaties  is  doubtless  the  most  splendid  achieve- 
ment of  American  diplomacy ;  it  is  surely  one  of  the 
greatest  boons  ever  conferred  upon  the  mercantile 
marine  of  the  world.  The  destructive  effects  of 
discriminating  and  retaliatory  taxation  of  shipping 
upon  all  who  resort  to  it  had  been  forced  home 
upon  our  early  statesmen  by  the  experience  of  the 
colonies  and  of  the  Confederation ;  and  in  freeing 
for  all  time  American  shipping,  and  with  it  the  ship- 
ping of  the  world,  from  such  warfare,  they  gave  to 
navigation  and  to  the  international  trade  by  which  it 
lives  an  impetus  equal  in  its  way  to  that  given  by 
the  substitution  of  steam  for  sail. 

Enlisting  a  people  predisposed  to  the  sea,  within 
easy  reach  of  boundless  forests  permitting  the  build- 
ing of  vessels  more  economically  than  was  possible 
in  England,  which  was  already  compelled  to  import 
much  of  its  ship-timber,  and  freed  by  diplomacy 
from  foreign  restrictions,  the  American  merchant 
marine  in  1860  had  reached  the  impressive  total  of 
5>353,868  tons,  of  which  2,379,396  tons  were  regis- 
tered for  foreign  trade.  The  total  tonnage  of  the 
United  Kingdom  was  but  4,586,742  tons,  and  of 


the  entire  British  empire,  5,710,968  tons,  while  the 
combined  tonnage  of  France,  the  component  parts 
of  the  present  German  empire,  and  Norway  was  lew 
than  the  tonnage  we  were  employing  in  foreign  trade 
alone.  The  tonnage  (including  repeated  voyages) 
of  American  vessels  entering  the  United  States  from 
foreign  ports  during  that  year  was  5,921,285,  and  of 
foreign  vessels,  2,353,911  tons.  The  tonnage  of 
American  vessels  entering  and  clearing  at  the  ports 
of  Great  Britain  and  Ireland  was  2,981,697  tons, 
against  3,227,591  tons  German  and  French  com- 
bined. 

In  1850  the  new  tonnage  built  by  the  United 
States  amounted  to  272,218  tons,  while  that  built 
by  Great  Britain  amounted  to  only  133,695  tons. 
In  1860  our  new  tonnage  was  214,798,  and  that  of 
our  foremost  rival,  301,535  tons.  Our  relative 
positions  had  changed  during  the  decade  before  the 
war.  In  1 85 5,  the  year  of  our  greatest  construction, 
the  United  States  built  2027  vessels,  of  an  aggregate 
tonnage  of  583,450,  of  which  381  were  full-rigged 
ships.  By  a  steady  and  rapid  decline,  without  equal 
in  our  marine  history,  the  product  of  our  yards  in 
four  years  fell  to  875  vessels,  of  156,602  tons,  in 
1859,  of  which  but  89  were  full-rigged  ships,  ris- 
ing in  1860,  but  only  to  214,798  tons.  The  decline 
is  not  to  be  attributed  to  the  substitution  of  steam 
for  sail,  for,  as  the  home  of  Robert  Fulton,  this 
country  in  the  early  years  of  steam-navigation  easily 
took  and  held  the  first  rank.  In  1860  our  steam 
fleet  aggregated  867,937  tons,  of  which  97,296  tons 
were  registered,  against  a  total  steam  tonnage  of 
only  500,144  for  the  entire  British  empire.  But 
the  change  from  wood — the  material  of  marine  con- 
struction in  which  our  new  country  abounded — to 
iron,  in  the  cheap  production  of  which  Great  Britain 
excelled,  completely  altered  the  conditions  of  ship- 
building, and  thus  changed  the  conditions  of  our 
own  and  competing  merchant  marines.  The  reasons 
for  this  change  of  material,  as  well  as  the  changes  in 
models  which  it  necessitated,  may  be  more  appro- 
priately considered  under  American  Ship  Building. 
Only  the  fact  and  its  relation  to  our  merchant  marine 
are  within  the  scope  of  this  article.  The  fact  be- 
came important  because  our  laws  restricted  the 
American  merchant  marine  to  home-built  ships. 
We  stood  by  the  principle  that  the  privileges  of  the 
flag  and  of  national  register  should  be  bestowed 
only  on  home-built  ships.  Great  Britain  and  other 
nations  had  already  abandoned  that  principle,  or 
soon  after  gave  it  up.  Her  foreign  and  colonial 
relations,  too,  had  impressed  upon  England  the  im- 
portance of  established  lines  of  steam-communica- 


40 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


don  by  sea,  and  forced  upon  her  the  policy  of  liberal 
assistance  in  the  establishment  and  maintenance  of 
such  lines.  Without  insular  or  remote  dependencies, 
and  freed  from  foreign  complications,  the  United 
States  lacked  the  motive  which  made  popular  in 
Great  Britain  the  policy  of  steamship  subsidies ;  and 
we  took  it  up  and  abandoned  it  intermittently,  thus 
establishing  an  uncertainty  in  legislation  which  in 
business  affairs  is  often  industrially  more  harmful 
even  than  a  wrong  policy  consistently  pursued. 
The  policies  of  admitting  foreign-built  vessels  to 
the  national  register, — or  "  free  ships,"  as  it  is  popu- 
larly designated, — and  of  subsidies  to  shipping,  may 
not  be  considered,  under  the  restrictions  placed 
on  this  article;  but  without  transgressing  proper 
bounds,  it  may  be  said  that  the  two  are  not  con- 
flicting nor  alternative  policies,  but  independent 
methods  of  dealing  with  different  subjects.  The 
former  aims  to  encourage  navigation  under  the 
national  flag;  the  latter  to  promote  domestic  ship 
building.  All  other  nations  have  adopted  one  or 
both  of  these  policies.  Our  own  country  has  adopted 
and  consistently  followed  neither.  Our  merchant 
marine,  in  consequence,  has  naturally  yielded  place 
on  the  seas  to  rival  nations  which  hastened  to  adopt, 
and  have  steadily  supported,  legislation  adjusted  to 
the  changed  conditions  of  construction  wrought  by 
the  substitution  of  steel  for  wood  as  the  chief  mate- 
rial of  ship  building. 

Eastward  for  3000  miles  from  our  shores  stretched 
the  Atlantic,  barren,  but  familiar  in  its  dangers  and 
rewards,  and  as  naturally  the  home  of  the  ambitious 
American  as  of  the  ambitious  English  boy,  as  natu- 
rally the  place  for  the  investment  of  American  as  of 
British  capital.  For  more  than  half  a  century  it  had 
been  the  scene  of  many  of  our  enterprises.  The 
discovery  of  gold  in  California  in  1 849  ;  the  begin- 
ning of  our  railroad  system,  which  doubled  in  the 
decade  from  1855  to  1865  ;  the  discovery  of  petro- 
leum, carrying  confusion  to  our  whaling-fleets, — to 
name  but  a  few  of  many  causes,— at  this  time  turned 
westward  from  the  sea  our  enterprise  and  capital. 
The  certainty  of  reward  for  labor  and  capital,  and 
the  amount  to  be  hoped  for,  were  greater  there  than 
the  Atlantic  or  China  trade  could  offer ;  and  from  a 
maritime  power,  pressing  close  upon  Great  Britain, 
the  United  States  became  a  railroad  power  of  the 
first  magnitude.  Other  articles  of  this  centennial 
volume,  testifying  to  our  wonderful  inland  growth, 
bear  silent  witness  to  one  cause  of  the  decline  of 
which  this  article  is  required  to  speak. 

From  1861  to  1865,  the  period  of  the  Civil  War, 
the  American  tonnage  registered  for  the  foreign 


trade  fell  from  2,540,020  tons  to  1,504,575  tons; 
and  within  the  four  years  immediately  following  the 
blockade  of  Southern  ports  by  the  Union  fleets  and 
the  fitting  out  of  Confederate  privateers  to  destroy 
Northern  merchantmen,  874,652  tons  of  American 
shipping  were  transferred  to  foreign  flags.  In  Sep- 
tember and  October,  1862,  the  Alabama  burned 
eighteen  American  merchantmen ;  and  the  damage 
then  done  to  American  vessels  and  cargoes  by  pri- 
vateers fitted  out  in  British  ports  was  later  com- 
promised by  the  payment  of  $15,000,000  to  us  by 
Great  Britain.  In  1865  the  tonnage  (including  re- 
peated voyages)  of  American  vessels  entering  the 
United  States  from  foreign  ports  had  decreased  to 
2,943,661  tons,  while  the  foreign  tonnage  had  in- 
creased to  3,216,967  tons.  The  war  thus  tremen- 
dously accelerated  a  decline  of  American  shipping 
which  from  other  causes  was  already  inevitable. 

The  carrying  power  of  the  world's  sea-going  mer- 
chant marine  in  1875  was  28,407,946  tons  ;  in  1895 
it  is  49,526,847  tons.  The  relative  rank  of  the  five 
principal  sea  powers  at  the  beginning  and  end  of 
this  period  follows : 

MARITIME  POWERS,  1875  TO  1895. 


1895. 

I87S- 

British  

27,885,806 

13,^47.^8^ 

German  

4,065,282 

1,604,773 

i  261.082 

4IO6   467 

Norwegian  

2,W?,I73 

i,40t;,<x8 

French  

2,121,550 

•  i.ttfo.aoo 

All  others  

0,84.0,0^4 

6,204,879 

Total  

4Q.  ^26.847 

28.4.07.04.6 

During  the  last  twenty  years  the  United  States 
and  Germany  have  changed  their  relative  ranks, 
and  this  year  only  seven  per  cent,  of  the  world's 
sea-going  tonnage  is  under  the  American  flag,  as 
compared  with  fifteen  per  cent,  twenty  years  ago. 
The  United  States  and  Italy  alone  of  the  ten  prin- 
cipal maritime  nations  show  a  decline  in  over-sea 
carrying  power  since  1875. 

During  the  fiscal  year  1 894  the  tonnage  of  Ameri- 
can vessels  (counting  repeated  voyages)  entering  the 
United  States  from  foreign  ports  was  4,654,679  tons, 
while  the  foreign  tonnage  was  15,334,984  tons. 
The  American  tonnage  entering  from  Europe  was 
341,876  tons;  the  foreign,  9,326,235  tons.  Trans- 
atlantic voyages  from  the  United  States  to  Europe 
and  Africa  numbered  187  under  the  American  flag, 
compared  with  5626  under  foreign  flags;  of  trans- 
pacific voyages  to  Asia,  Australia,  and  Oceanica,  311 
were  under  the  American  and  351  under  foreign 


EUGENE  T.  CHAMBERLAIN. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


flags.  Our  shipping  in  foreign  trade  is  now  almost 
wholly  engaged  in  voyages  on  the  Lakes  and  north- 
ern borders  to  the  British  possessions,  and  to  Central 
America,  the  Caribbean  coast  of  South  America, 
and  the  West  Indies.  The  statistics  given,  and  con- 
clusions to  be  drawn  from  them,  should  be  modified 
by  one  consideration,  which,  though  not  a  matter 
of  official  record,  is  a  well-understood  business  fact. 
Within  the  last  fifteen  years  American  capital  has 
purchased  abroad  a  considerable  number  of  steam- 
ships, and  American  enterprise  is  operating  them  in 
transatlantic  trade.  Though  barred  by  the  law  from 
the  use  of  the  flag,  these  vessels  are  the  evidence  of 
an  awakened  maritime  spirit,  promising  the  attain- 
ment of  higher  maritime  rank  by  the  nation.  This 
awakened  spirit  has  already  secured  the  admission 
of  the  Paris  and  New  York  and  the  construction  of 
the  St.  Louis  and  St.  Paul,  giving  to  the  country  a 
line  of  four  steamships  unsurpassed  in  the  world. 
The  United  States,  in  consequence,  for  the  first  time 
in  many  years,  have  entered  into  competition  for 
the  express,  passenger,  and  mail  traffic  of  the  north 
Atlantic.  In  one  instance  we  have  thus  adopted 
the  policy — free  ships  and  liberal  compensation  to 
home-built  ships  for  public  services — by  which  our 
rivals  on  the  sea  have  made  themselves  formidable. 
If  that  instance  is  sporadic,  its  full  results  are  already 
in  sight.  But  if  it  is  the  beginning  of  a  new  policy, 
approved  by  the  experience  of  nations,  we  are  enter- 
ing our  second  mercantile  century  with  the  promise 
of  a  restored  merchant  marine. 

More  than  fifty  years  must  pass  before  the  history 
of  the  first  century  of  our  merchant  marine  on  the 
Pacific  coast  can  be  written.  Beginning  in  1849  at 
San  Francisco  with  722  tons  sail,  our  Pacific  fleet 
doubled  its  tonnage  during  the  war  period,  and  now 
numbers  1520  vessels,  of  456,359  tons.  San  Fran- 
cisco stands  alone  among  our  chief  seaports  as  enter- 
ing and  clearing  in  foreign  trade  a  larger  tonnage  of 
American  than  of  foreign  vessels ;  and  with  the  open- 
ing of  new  Asiatic  markets  and  the  need  of  steadily 
increasing  tonnage  our  geographical  position  des- 
tines us  to  be  the  sea  power  of  the  Pacific.  The 
century's  record  of  American  shipping  on  the  At- 
lantic coast  has  been  a  story  of  national  pride,  tem- 
pered with  national  regret  and  mortification ;  the 
record  of  our  shipping  on  the  Pacific  is  one  of  brief 
achievement  and  good  promise.  Splendid  perform- 
ance and  bright  augury,  not  only  for  the  particular 
section  itself,  but  for  our  national  future  as  a  mari- 
time power,  fill  every  year  of  the  record  of  our  mer- 


chant fleets  on  the  Great  Lakes.  Two  years  after 
Jay's  treaty  the  first  small  merchant  vessel  was  built 
on  the  lakes  west  of  Niagara,  and  when  the  first 
half-century  was  ended  the  tonnage  of  our  lake 
ports  was  only  89,000  tons.  On  June  30,  1895,  our 
lake  fleets  comprised  3342  vessels,  of  1,341,459  tons, 
half  in  numbers  and  two  thirds  in  tonnage  being 
steam-vessels.  This  fleet  in  carrying  power  may  be 
estimated  at  2,666,261  tons.  These  figures  mean 
that  we  have  created  on  our  inland  seas  a  mercan- 
tile naval  power  excelled  only  by  the  strength  of 
Great  Britain  or  Germany  on  the  high  seas,  greater 
than  France  or  Norway,  or  than  any  other  two 
maritime  powers  combined.  Natural  bonds,  easily 
broken,  fetter  from  free  employment  on  the  ocean 
our  reserve  powers  as  a  ship-building  and  ship-own- 
ing nation,  now  confined  to  the  Great  Lakes.  So 
eager  to  pass  these  barriers  have  these  powers  been 
that  the  lake  interests  have  built  steamships  for  the 
Pacific  trade,  cut  them  in  two  in  order  to  pass  the 
locks  and  canals  which  separated  them  from  the 
Atlantic,  and  then  put  them  together  for  the  voyage 
round  the  Horn.  Of  our  669  steamships  of  over 
1000  tons,  359  are  shut  within  the  lakes.  Our 
production  of  iron  and  steel  draws  close  upon,  and 
in  several  years  has  surpassed,  that  of  Great  Brit- 
ain. Freed  by  a  ship-canal  to  the  Atlantic,  our 
lake  ship-building  interests  —  having  close  at  their 
doors  the  center  of  production  of  sixty  per  cent,  of 
our  iron  output  —  can  compete  on  the  high  seas, 
and  who  could  then  doubt  that  interests  which  in 
confinement  have  outstripped  the  nations  of  the 
world,  except  two,  will  help  to  restore  to  the  United 
States  again  the  rank  it  held  as  close  second  to  the 
entire  British  empire  only  thirty-five  years  ago  ? 
Join  the  union  of  the  Great  Lakes  to  the  Atlantic 
with  a  removal  of  the  narrow  Central  American 
barrier  which  separates  the  Atlantic  and  Pacific, 
and,  as  steel  in  time  becomes  cheaper  here  than 
anywhere  in  the  world,  may  we  not  look  even  to 
surpass  in  the  first  half  of  our  second  century  the 
rank  we  attained  in  the  first  half  of  our  first  century, 
and  take  to  ourselves  the  rule  of  the  wave? 

Eastward  of  the  forty-four  States  of  the  Union  for 
3000  miles,  westward  for  5000,  stretch  the  oceans 
as  we  begin  our  second  century  of  commercial  in- 
dependence, a  nation  richer  in  performance  and 
promise  than  any  other  the  world  knows.  Geog- 
raphy, natural  resources,  and  our  benign  policy  of 
neutrality  point  to  an  ultimate  destiny  for  this  country 
as  the  world's  great  ocean  carrier  of  the  future. 


&U3UU. 


CHAPTER   VII 

OUR  COMMERCIAL  WEALTH  AND  VOLUME  OF  BUSINESS 


N'OT  since  the  history  of  the  world  began  has 
there  been  such  a  marvelous  advancement 
of  all  factors  creating  wealth  and  developing 
trade  and  commerce  as  during  the  past  century ;  nor 
in  any  other  section  has  the  result  been  so  phenomenal 
as  that  attained  in  the  United  States.  In  1795  this 
country  had  acquired  but  a  fraction  of  its  present 
geographical  limits ;  to  the  West  it  reached  only 
to  the  Mississippi  River,  and  not  until  1803,  by 
the  purchase  of  Louisiana,  did  its  territory  extend 
north  and  west  to  the  Pacific  and  south  to  the 
Gulf  of  Mexico.  In  addition  to  the  thirteen 
original  States,  Vermont  and  Kentucky  had  been 
admitted  to  the  Union ;  but  the  populated  area  of 
the  country  was  only  366,000  square  miles,  against 
3,580,000  square  miles  to-day ;  and  the  total  popu- 
lation was  approximately  4,500,000,  scattered  along 
the  Atlantic  coast,  the  center  being  about  the  city 
of  Baltimore ;  while  to-day  the  population  is  about 
70,000,000,  or  more  than  fifteen  times  as  great,  the 
center  of  population  having  moved  almost  directly 
west  nearly  500  miles. 

It  is  hardly  necessary  to  explain  that  the  com- 
merce of  the  country  in  1795  gave  little  promise  of 
what  it  has  since  become.  The  only  efficient  means 
of  transportation  were,  of  course,  by  water,  travel  by 
land  being  a  tedious  process,  in  wagons  or  on  horse- 
back, over  rough  and  unsatisfactory  roads.  It  is 
self-evident  that  domestic  trade  at  that  time  was  of 
a  primitive  character,  and  any  attempt  to  fully  char- 
acterize it  must  fail  except  in  so  far  as  indicated  by 
a  comparison  of  imports  and  exports. 

Leading  domestic  industries  one  hundred  years 
ago  included  the  manufacture  of  household  and 
other  (chiefly  wool  and  hemp)  textile  products  and 
rag  carpets,  pig  and  bar  iron  in  a  small  way,  wheel- 
wrighting  and  smithing,  lumber,  carpentry,  furniture, 
wagons,  harness,  hats,  shoes,  ships,  and  meat  pro- 
ducts, the  whole  probably  not  aggregating  very 
many  million  dollars  in  value  annually.  A  review 


of  the  total  value  of  the  annual  products  of  these  or 
like  domestic  industries  in  the  census  year  1890 
presents  a  picture  of  unparalleled  expansion,  the 
value  of  the  products  in  the  nineteen  lines  indicated 
amounting  five  years  ago  to  the  enormous  total  of 
more  than  $4,107,000,000,  in  addition  to  which  our 
metallic  and  mineral  products  in  1890  were  valued 
at  fully  $587,000,000.  It  would  be  impracticable 
to  indicate  fully  the  thousand  and  one  kindred  in- 
dustries to  which  some  of  those  identified  with  the 
earlier  history  of  our  country  have  given  rise.  And 
no  reader  of  these  pages  need  be  reminded  of  the 
enormous  stimulus  to  the  production  of  wealth 
resulting  from  the  railroad,  which  is  only  about  sixty 
years  old,  from  the  discovery  of  petroleum  or  min- 
eral oil,  the  manufacture  of  illuminating  gas,  and 
the  production  and  development  of  electrical  motors 
and  appliances. 

The  total  value  of  foreign  shipments  from  the 
United  States  in  1795  was  about  $47, 989,000,  which, 
while  small  when  viewed  from  the  standpoint  of  to- 
day, meant  a  great  deal  at  the  time,  in  that  it  repre- 
sented an  increase  of  1 50  per  cent,  over  the  total  four 
years  previous.  The  exports  were  mainly  to  France 
and  her  possessions,  the  free  cities  of  Hamburg  and 
Bremen,  Great  Britain  and  her  dependencies,  Spain 
and  her  possessions,  the  United  Netherlands,  the 
Danish  West  Indies,  Italy,  China,  and  the  East 
Indies.  Traffic  with  Russia  was  of  some  impor- 
tance, but  with  the  other  countries  of  northern 
Europe  it  was  inconsiderable. 

A  fair  estimate  of  the  character  of  our  export 
trade  at  that  time  may  be  gained  from  a  report  of 
the  Secretary  of  the  Treasury  in  1793,  covering  the 
year  1792,  which  enumerates,  among  the  leading 
articles  of  foreign  shipment,  breadstuffs,  tobacco, 
rice,  wood,  salted  fish,  pot  and  pearl  ash,  salted 
meats,  indigo,  horses,  mules,  whale-oil,  flaxseed,  tar, 
pitch,  and  turpentine,  breadstuffs  constituting  more 
than  one  third  of  the  whole.  South  Carolina  and 


42 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


«  Georgia  were  prominent  as  producers  and  shippers 
of  indigo,  but  that  was  before  cotton  had  become  a 
noteworthy  product.  It  had  been  grown  and  ex- 
ported as  early  as  1791,  but  only  in  small  quantities ; 
the  cotton-gin,  invented  by  Eli  Whitney,  did  not 
appear  until  two  years  later.  In  his  celebrated  re- 
port on  Manufactures,  Secretary  Hamilton,  though 
expressing  the  hope  of  a  future  of  usefulness  for  the 
cotton  industry,  yet  said  that,  "  not  being,  like  hemp, 
an  universal  production  of  the  country,  it  afforded 
less  assurance  of  an  adequate  internal  supply ; "  and 
he  devoted  some  space  to  the  advocacy  of  the  re- 
peal of  the  duty  on  imported  cotton,  as  well  as  of 
granting  a  bounty  on  cotton  produced  in  the  United 
States,  when  wrought  at  a  home  manufactory.  In 
a  comparatively  few  years,  however,  all  this  had 
changed,  and  American  cotton  had  become  a  factor 
of  the  first  importance  in  the  commerce  of  the  world. 

At  the  period  under  consideration  the  import  ex- 
ceeded the  export  trade  in  value.  Imports  for  the 
year  1795  were  valued  at  $69,756,258.  Of  this 
total,  $30,972,215  came  from  Great  Britain  and 
her  possessions,  England  furnishing  $21,108,350. 
Next  in  importance  was  France  and  her  possessions, 
of  which  contributions  the  French  West  Indies  sup- 
plied the  greater  share.  Following  these  came  in 
order  Spain  and  her  possessions,  the  United  Nether- 
lands and  their  possessions,  the  Danish  West  Indies, 
Portugal  and  her  possessions,  Hamburg  and  Bremen, 
Russia,  China,  and  the  East  Indies.  The  importa- 
tions from  Great  Britain  comprised  manufactures  of 
wool,  cotton,  linen,  silk,  metal,  glass,  and  paper, 
together  with  salt,  steel,  lead,  nails,  cheese,  beer, 
and  porter;  those  from  the  East  Indies  included 
cotton,  sugar,  and  pepper;  from  the  West  Indies, 
spirits,  sugar,  and  coffee ;  and  from  other  countries, 
coffee,  sugar,  molasses,  brandy,  gin,  wines,  and  tea. 

Although  the  total  value  of  exports  from  the 
United  States  one  hundred  years  ago  was  $47,989,- 
472,  by  1844  (fifty  years  later)  it  had  grown  to 
$105,745,832 — more  than  doubled.  It  was  during 
this  period,  of  course,  that  highways  were  con- 
structed between  some  of  the  larger  trading  centers, 
that  the  Erie  Canal  was  built,  and  that  the  country 
reached  a  high  degree  of  prosperity  as  a  commercial 
nation.  It  was  obliged  to  wait  for  the  development 
of  its  agricultural  resources  and  its  shipping  interests 
on  the  New  England,  south  Atlantic,  and  Gulf 
coasts.  The  total  value  of  importations  in  1795 
was  $67,756,258,  and  fifty  years  later  (in  1844)  it 
had  grown  to  $102,604,606,  an  increase  of  more 
than  fifty  per  cent. 

While  to  no  nation  has  been  given  a  preeminent 


manufacturing  genius,  yet  we  have  probably  de- 
veloped peculiar  skill  not  only  in  improving  upon 
inventions  which  came  to  us  in  the  rough,  but  also 
in  the  more  general  utilization  of  them  upon  a  much 
grander  scale.  At  the  outbreak  of  our  late  Civil 
War  the  total  value  of  exports  had  increased  to 
$333i576>°57>  about  seven  times  the  value  sent 
abroad  in  1795.  The  aggregate  value  of  importa- 
tions in  1860  was  $353,616,119,  being  five  times 
the  corresponding  total  in  1795. 

In  1877,  at  the  beginning  of  the  revival  after  the 
period  of  depression  following  the  panic  of  1873 
(which  was  the  outcome  of  inflation,  overtrading, 
and  speculation  succeeding  the  war),  exportations 
for  the  year  were  valued  at  $602,475,220,  or  about 
twice  the  like  total  in  1860,  and  nearly  twelve  times 
the  value  of  shipments  abroad  in  1795.  Importa- 
tions in  1877  were  valued  at  $451,323,126,  an  in- 
crease of  forty  per  cent,  over  the  total  in  1860,  and 
nearly  seven  times  the  aggregate  value  in  1795. 
From  1877  a  rapid  expansion  in  the  volume  of  our 
domestic  and  foreign  trade  took  place,  not  only  in 
exportations  of  cereal  and  other  domestic  products, 
but  owing  to  the  extension  of  our  railroad  system 
and  the  diversification  and  development  of  our 
manufacturing  industries.  Over-speculation  in  finan- 
cial circles  brought  on  the  panic  of  1884,  which 
was  followed  by  a  reaction  in  business,  and  after  that 
came  a  wide  expansion  of  trade  in  1 890,  1 89 1 ,  and 
1892,  followed  by  the  panic  of  two  years  ago. 

In  the  fiscal  year  1894,  one  hundred  years  after, 
the  total  value  of  exports  amounted  to  $1,019,572,- 
873,  forty  per  cent,  more  than  in  1877,  three  times 
the  value  of  shipments  abroad  in  1860,  and  more 
than  twenty-one  times  the  total  value  of  our  exports 
in  1795.  The  aggregate  value  of  importations  into 
the  United  States  in  1894  was  $740,730,822,  an  in- 
crease of  sixty  per  cent,  as  compared  with  1877, 
more  than  double  the  corresponding  total  in  1860, 
and  eleven  times  the  total  value  of  importations  in 

'795- 

An  indication  of  the  grand  total  value  of  the  in- 
terior and  exterior  commerce  of  the  United  States 
must  be  an  approximation  only,  owing  to  the  dearth 
of  statistics.  One  hundred  years  ago  the  total 
value  of  imports  and  exports  amounted  to  only 
$117,745,730,  but  in  1894  like  totals  aggregated 
$1,760,203,695,  or  fifteen  times  as  much.  While 
there  are  not  the  necessary  data  to  indicate  closely 
the  total  volume  of  our  domestic  trade  at  the  close  of 
the  last  century,  there  is,  of  course,  much,  although 
incomplete,  information  bearing  upon  the  interior 
traffic  of  the  United  States  to-day. 


44 


ONE  HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


Any  general  estimate  of  the  wealth  of  the  coun- 
try at  the  close  of  the  last  century  is,  of  course,  de- 
ficient when  contrasted  with  census  reports  on  that 
subject  during  the  past  forty  years.  The  total, 
$620,000,000,  is  the  appraisement  of  the  value  of 
houses  and  lands  one  hundred  years  ago,  and  must, 
of  course,  overlook  much  personal  property  of  value, 
particularly  in  that  it  does  not  take  account  of  the 
value  of  slaves.  But  even  if  one  should  presume 
that,  with  all  allowances  for  this  and  other  omitted 
items,  the  grand  total  was  as  much  as  $900,000,000, 
the  contrast  with  the  total  wealth  of  the  country  in 
1850,  after  half  a  century  of  growth,  was  startling 
indeed,  showing  an  increase  of  nearly  eightfold. 

By  1860  we  had  more  than  doubled  the  material 
resources  of  1850.  The  ratio  of  gain  from  1795  to 
1860  (when  the  total  was  $16,157,000,000),  was  still 
more  remarkable,  showing  more  than  sixteen  times 
the  total  at  the  close  of  the  last  century.  From 
1860  onward  the  increase  of  national  wealth  was  so 
rapid  that  comparisons  with  the  beginning  of  the 
century  become  fairly  amazing.  The  increase  by 
1870  was  nearly  twenty-seven  to  one,  in  1880  nearly 
forty-nine  to  one,  and  in  1890,  less  than  a  century 
having  elapsed,  the  total  wealth  of  the  country  was 
nearly  seventy-five  times  that  in  1795,  the  census 
placing  it  at  $65,037,000,000. 

When  it  comes  to  the  development  of  our  trans- 
portation interests  by  land  and  water,  the  record  of 
expansion  of  our  railroad  traffic  within  sixty  years  is 
seen  to  surpass  that  of  the  remainder  of  the  civilized 
world,  with  178,000  miles  of  main  line  of  railways, 
$5,075,000,000  of  capital  stock,  $5,665,000,000  of 
funded  indebtedness,  $1,080,000,000  of  gross  an- 
nual earnings,  and  net  traffic  earnings  of  $322,000,- 
ooo  per  annum,  the  railways  having  transported 
about  675,000,000  tons  of  freight  alone  in  1894. 
Our  marine  transportation  interests,  notwithstanding 
the  check  since  the  Civil  War,  present  a  total  of 
25>54°  craft  registered  at  United  States  interior 
cities  and  ports,  sailing  from  the  Pacific,  Gulf, 
and  Atlantic  coasts,  on  the  Mississippi,  Ohio,  and 
Monongahela  rivers,  and  on  the  Great  Lakes,  valued 
at  $215,000,000.  Freight  transportation  on  the 
Mississippi,  Ohio,  and  Monongahela  rivers  in  1894 
did  not  vary  much  from  22,000,000  tons,  or  a  little 
more  than  half  that  estimated  to  have  been  carried 
on  the  Great  Lakes,  where  the  total  was  about  40,- 
000,000  tons.  On  the  Erie  and  tributary  canals  the 
total  tonnage  last  year  probably  amounted  to  about 
one  tenth  that  on  the  Great  Lakes,  or  4,000,000 
tons,  which  would  leave  probably  not  to  exceed 
125,000,000  tons  of  freight  carried  seaward  per 


annum  in  vessels  registered  at  the  United  States 
ports.  This  indicates  that  the  total  freight  tonnage 
transported  by  water  on  the  Mississippi,  Ohio,  and 
Monongahela  rivers,  on  the  Great  Lakes  and  the 
Erie  Canal,  and  seaward  on  vessels  registered  at 
United  States  ports,  is  less  than  one  third  the  weight 
of  freight  transported  by  the  railways  of  the  country 
each  year. 

Another  evidence  of  the  rapidity  of  the  growth  of 
the  wealth  of  the  country  is  conveyed  in  the  fact 
that,  whereas  the  government  receipts  in  1795 
amounted  to  only  $9,419,802,  last  year  they  aggre- 
gated $313,310,166,  more  than  thirty-four  times  as 
much ;  and  while  the  expenditures  of  the  govern- 
ment in  1795  amounted  to  $10,435,070,  last  year 
they  were  more  than  thirty-five  times  as  much — 
$356,135,215.  On  the  other  side,  there  was  a  pub- 
lic debt  of  $80,747,587  one  hundred  years  ago  (a 
dozen  or  more  years  after  the  close  of  the  Revo- 
lutionary War),  while  on  December  i,  1895,  the  net 
national  debt  was  not  quite  fourteen  times  as  large, 
amounting  to  only  $1,125,883,997.  The  signifi- 
cance of  this  exhibit  lies  in  the  fact  that  notwith- 
standing the  enormous  expense  involved  in  four 
years  of  Civil  War — three  decades  ago ;  notwith- 
standing the  consequent  check  to  commercial  and 
industrial  enterprise  in  those  and  in  succeeding  years 
of  rehabilitation,  yet  so  great  were  our  powers  of  re- 
cuperation, and  so  remarkable  was  the  ability  of  the 
nation  to  liquidate  its  enormous  war  debt,  that  we 
find  ourselves  to-day  with  a  national  debt  of  only 
$16  per  capita,  as  contrasted  with  one  of  $18  per 
capita  one  hundred  years  ago — a  dozen  years  after 
the  close  of  the  War  of  the  Revolution.  These 
facts  in  reference  to  the  relative  national  indebted- 
ness, at  once  interesting  as  well  as  instructive,  gather 
significance  when  viewed  in  conjunction  with  best 
obtainable  data  respecting  the  wealth  of  the  country 
one  hundred  years  ago  and  to-day.  The  strength  of 
our  position  may  be  expressed  in  the  statement  that 
whereas  our  national  debt  amounted  to  $18  per 
capita  at  the  close  of  the  last  century,  and  our 
national  wealth  approximately  to  $200  per  capita- 
to-day  the  national  debt  is  only  $16  per  capita,  and 
the  wealth  per  individual  somewhat  more  than 
$1000.  The  postal  service,  of  modest  propor- 
tions in  1795,  had  already  begun  to  show  remark- 
able growth,  for  from  the  time  the  Constitution  went 
into  effect  the  number  of  post-offices  had  grown 
from  75  to  453.  At  this  time  there  are  more  than 
70,000  post-offices  in  the  country,  and  the  revenue 
and  expenses  have  increased  in  almost  as  great  a 
ratio. 


CHARLES  F.  CLARK. 


ONE   HUNDRED  YEARS  OF  AMERICAN  COMMERCE 


Recognizing  the  many  and  diverse  elements  in- 
volved in  any  discussion  of  the  volume  of  domestic 
trade,  it  remains  to  be  pointed  out  that  the  total 
amount  of  gross  earnings  of  railroads  in  the  United 
States  in  1894  amounted  to  $1,080,305,000,  or  $61,- 
000,000  more  than  the  total  volume  of  our  exports 
of  produce,  coin,  and  bullion  for  that  year,  and 
more  than  twice  the  volume  of  gross  railway  earn- 
ings in  1877,  seventeen  years  ago. 

The  foregoing  outline  of  some  of  the  more  im- 
portant elements  involved  in  any  consideration  of 
the  development  of  the  commerce  and  the  wealth  of 
the  United  States  during  the  past  century  must  for- 
ever stand  out  conspicuously,  as  indicating  a  rapidity 
and  withal  a  conservatism  of  growth  on  the  part  of 
a  new  empire  the  like  of  which  the  world  has  never 
seen. 

Perhaps  as  fair  an  indication,  within  limitations, 
of  our  total  volume  of  wholesale  business,  foreign 
and  domestic,  is  that  given  by  totals  of  transactions 
at  clearing-house  banks — about  1000  in  number — 
at  nearly  eighty  of  the  more  important  cities.  Dur- 
ing 1894  the  grand  total  of  bank  clearings  aggre- 
gated nearly  $45,000,000,000,  although  the  corre- 
sponding total  two  years  before  amounted  to  nearly 
$62,000,000,000,  the  largest  annual  aggregate  re- 
ported since  clearing-house  totals  have  been  col- 
lected. These  transactions  represent,  for  the  most 
part,  wholesale  dealings  at  nearly  all  the  larger  towns 
and  cities  throughout  the  country,  and,  to  a  smaller 
extent,  retail  transactions  in  that  portion  of  the  busi- 
ness of  the  country  which  are  settled  with  checks. 

It  would  not  be  so  bold  a  stroke  as  it  might  ap- 
pear to  estimate  the  probable  approximate  grand 
total  of  business  transacted  annually,  not  only 
through  the  banks,  but  across  counters,  both  whole- 
sale and  retail.  The  average  total  of  bank  clearings 
annually  during  the  past  five  years  has  been  about 
$55,000,000,000,  or  thirty-two  times  the  total  value 
of  our  exports  and  imports,  including  coin  and  bul- 
lion, in  the  fiscal  year  1894.  This  indicates  in  some 
degree  the  enormous  preponderance  in  the  value  of 
our  total  commercial  and  industrial  transactions,  as 
compared  with  that  portion  carried  on  with  foreign 
countries.  It  would  be  difficult  to  conceive  of  the 
total  value  of  all  our  domestic  and  foreign  commerce 
(judged  by  bank-clearing  totals  and  other  available 
data)  as  averaging  less  than  $70,000,000,000  annu- 
ally, and  probably  a  larger  sum  would  be  required 
to  gauge  it. 

Perhaps  as  striking  an  indication  of  the  enormous 
expansion  of  wealth  and  business  in  the  United  States 
within  one  hundred  years  as  any  other  is  found  in 


the  statement  that  whereas  the  approximate  total 
banking  capital  of  the  country  in  1 795  was  about 
$12,000,000,  the  total  capital  of  national  and  other 
banks  two  years  ago,  as  reported  by  the  comptroller 
of  the  currency,  amounted  to  $1,067,000,000,  in 
addition  to  which  there  were  reported  belonging  to 
the  banks  $686,000,000  of  surpluses  and  profits. 
From  this  it  would  appear  that  whereas  the  total  avail- 
able banking  capital  of  the  country  one  hundred 
years  ago  was  only  about  $2.65  per  capita,  the  pro- 
portion per  capita  two  years  ago  was  only  about  six 
times  as  much.  Yet  the  banking  capital  of  the 
country  two  years  ago  was  about  eighty-nine  times 
the  amount  in  1795.  It  may  strike  many  as 
remarkable  that,  whereas  the  population  has  in- 
creased fifteen-fold,  the  volume  of  business  probably 
thirty-three  times,  and  the  wealth  of  the  country  more 
than  seventy-five  times  within  the  last  one  hundred 
years  the  total  banking  capital  is,  in  round  num- 
bers, only  about  six  times  as  much  per  capita  to-day 
as  at  the  close  of  the  last  century.  The  lesson 
taught  by  this  is  most  timely  in  this  day  of  ex- 
cessive and  frequently  unnecessary  fears  that  the 
volume  of  the  currency  of  the  country  will  not  be 
maintained  at  the  maximum.  The  development  of 
the  clearing-house  principle  in  business,  the  syste- 
matic organization  and  wide-spread  distribution  of 
credits  of  merchants  and  manufacturers,  together 
with  the  enormously  increased  use  of  checks,  drafts, 
and  bills  of  exchange, — representatives  of  credit, — 
are  practically  responsible  for  the  ability  of  the  banks 
to  do  the  enormous  business  of  the  country  on  only 
six  times  the  banking  capital  per  capita  they  pos- 
sessed one  hundred  years  ago. 

With  the  tenfold  increase  in  populated  area  of  the 
country  our  population  is  fifteen  times  as  large  as  it 
was  at  the  close  of  the  last  century,  while  the  in- 
creasing complexity  of  governmental  administration 
has  increased  total  receipts  from  customs  and  inter- 
nal revenue  thirty-four  times  and  expenses  thirty- 
five  times  what  they  were  in  1795.  It  may  be  no 
more  than  a  coincidence,  but  it  is  certainly  note- 
worthy that  an  increase  of  1500  per  cent,  in  popula- 
tion has  brought  with  it  almost  the  same  increase 
in  the  total  annual  volume  of  exports  and  imports. 
The  fact  that  total  gross  railway  earnings  have 
doubled  in  seventeen  years  is  far  less  significant  than 
that  they  are  in  excess  of  the  total  volume  of  our 
exports  of  merchandise,  produce,  coin,  and  bullion. 
But  of  even  greater  interest  is  the  fact  that  the  an- 
nual volume  of  bank  clearings  at  about  eighty  cities 
throughout  the  United  States  indicates  a  grand  total 
of  domestic  and  foreign  trade  probably  forty  times 


46 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


greater  than  the  total  value  of  exports  and  of  im- 
ports. There  remains  only  to  be  recalled  the  in- 
crease of  our  interior  commerce  to  thirty-eight 
times  the  volume  of  our  business  with  foreign 
countries,  over  and  above  which  is  the  picture 
of  the  total  wealth  of  the  country— nearly  seventy- 
five  times  what  it  was  at  the  beginning  of  the 
century. 

In  thus  concluding  a  hurried  and  necessarily  brief 
review  of  some  of  the  more  salient  features  of  the 
development  of  the  wealth,  trade,  and  manufactur- 
ing industries  of  the  United  States,  the  suggestion 
is  almost  involuntary  that  there  still  remains,  in  spite 
of  much  that  has  been  accomplished  in  recording  our 


material  advancement,  an  opportunity  for  perfecting 
and  supplying  systems  by  which  records  may  be 
kept  of  various  spheres  of  activity.  It  is  a  matter 
of  regret  that  more  definite  information  is  not  ob- 
tainable respecting  what  should  go  to  make  up  an 
accurate  estimate  of  the  total  volume  of  the  trade  of 
the  country.  It  is  highly  probable  that  estimates 
and  calculations  presented  herewith  get  as  close  to 
the  fact  as  practicable,  yet  much  might  be  done 
were  statistics  affecting  trading,  transportation,  and 
banking  compiled  and  prepared  with  the  system 
and  comprehensiveness  which  mark  reports  of  the 
Census  Department  on  manufacturing  industries  of 
the  country. 


CHAPTER   VIII 

THE   CORPORATION   IN   COMMERCE 


THE  word  "corporation"  is  comprehensive. 
Every  nation,  every  State,  every  city,  town, 
and  village,  is  a  corporation.  Every  parish 
and  every  similar  church  society  is  a  corporation, 
and  so  are  most  of  our  colleges  and  institutions  of 
learning.  The  history  of  such  corporations  during 
the  last  hundred  years,  interwoven  as  it  is  with  our 
national  development,  would  fill  volumes ;  but  in  this 
article  the  writer  must  confine  himself  to  some  re- 
marks upon  the  corporation  with  which  we  are  famil- 
iar in  business — the  ordinary  joint-stock  corporation, 
operated  for  the  profit  of  the  shareholders.  The  part 
played  by  such  corporations  in  the  history  of  the 
last  century  of  American  commerce  is  a  conspicuous 
one,  and  a  concise  historical  sketch  of  this  impor- 
tant form  of  business  organization,  giving  a  brief 
glimpse  at  its  remarkable  growth,  together  with 
some  reflections  as  to  its  influence  upon  the  business 
community  and  the  country  at  large,  should  be  of 
interest. 

In  1795  business  corporations  in  America  were 
small  in  number  and  insignificant  as  to  wealth. 
There  were,  to  be  sure,  several  banks,  a  number  of 
insurance  companies,  a  few  turnpike  companies, 
some  stage-coach  companies,  and  some  manufac- 
turing corporations.  The  bulk  of  the  business  of 
the  country  was  conducted,  however,  by  individual 
traders  or  by  partnership  concerns.  With  the 
growth  of  trade  and  the  increase  in  commercial 
activity  of  all  sorts  the  organization  of  corporations 
was  speedily  resorted  to  as  offering  many  advan- 
tages over  the  old-fashioned  partnership.  Among 
those  advantages  is  the  opportunity  afforded  to  all 
to  embark  such  part  of  their  property  as  they  may 
choose  in  enterprises,  whatever  they  may  be,  with- 
out incurring  the  liability  of  general  partners;  in 
other  words,  a  man  can  invest  such  sum  as  he  is 
willing  to  lose  in  the  business,  with  the  certainty 
that  he  cannot  be  compelled  to  pay  anything  beyond 
that  amount  toward  the  debts  of  the  concern. 


Then,  again,  a  shareholder  in  a  corporation  has  his 
affairs  managed  for  him  by  salaried  officers,  without 
care  or  responsibility  on  his  part. 

At  first,  in  order  to  organize  a  corporation,  legis- 
lative action  was  required  in  every  case.  This  in 
earlier  times  answered  very  well ;  but  this  power 
was  abused,  and  by  and  by  it  was  found  necessary 
to  limit  the  power  of  the  various  State  legislatures  in 
this  respect.  Corporations  are,  in  the  eye  of  the 
law,  persons,— artificial  persons,— and  it  was  found 
that  a  person  of  this  description,  having  no  body  to 
be  imprisoned  nor  soul  to  be  eternally  punished,  was 
hard  to  control ;  so  the  legislatures  from  time  to 
time  passed  general  laws  regulating  the  formation 
and  management  of  corporations,  endeavoring  in  this 
way  to  restrict  them  as  to  power,  and  to  force  them 
to  confine  themselves  each  to  its  own  particular 
business.  Efforts  have  been  made  from  time  to 
time  by  the  State  legislatures  to  enact  a  systematic 
code  regulating  all  corporations,  with  more  or  less 
success ;  so  now  we  have  in  many  States  a  general 
law  for  banking  corporations,  another  for  insurance 
companies,  another  for  trust  companies,  another  for 
railroads,  and  there  are  still  others.  Recently,  also, 
following  the  example  of  the  English  Parliament, 
many  of  the  States  have  enacted  laws  under  which 
corporations  may  be  organized  to  carry  on  any 
legitimate  business,  no  matter  what,  not  already 
provided  for  by  general  statutes. 

There  can  be  no  question  that  corporate  organi- 
zation has  been  of  great  advantage  to  the  country— 
to  the  poor  as  well  as  to  the  rich.  By  greater  econ- 
omy in  production,  rendered  possible  by  concentra- 
tion of  capital,  the  poor  have  profited  in  the  reduced 
price  of  most  of  the  necessaries  and  comforts  of  life. 
The  reduction  in  the  prices  of  these  articles  is  a 
most  interesting  subject  for  study  and  reflection,  and 
if  space  permitted  it  would  be  easy  to  give  numer- 
ous illustrations.  Indeed,  it  would  be  hard  to  find 
any  considerable  number  of  articles,  commonly 


47 


48 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


called  comforts  or  necessaries,  the  price  of  which 
has  not  been  reduced  by  the  direct  influence  of  cor- 
porate management.  The  comfort  and  convenience 
of  all  dwellers  in  this  country  have  been  greatly  pro- 
moted by  corporate  control  of  business.  Take,  for 
instance,  our  facilities  for  traveling.  Again,  the 
regularity  and  cheapness  of  communication  by  mail, 
telegraph,  and  telephone  have  only  been  made  pos- 
sible by  the  cooperation  of  hundreds  of  corporations 
all  working  together  in  intelligent  harmony.  Again, 
what  could  we  now  do  without  banks,  and  without 
insurance  companies?  We  owe  it  to  the  corpora- 
tions that  we  can  protect  our  property  against  loss 
by  fire,  and  our  families  from  want  in  the  case  of 
the  death  of  their  breadwinner ;  and  to  the  savings- 
banks  that  we  can  safely  keep  our  surplus  earnings, 
and  receive  them  back  again,  safe  and  intact,  with 
reasonable  interest.  And  so  we  may  sum  it  all  up 
in  one  word  and  say  that  the  conditions  of  modern 
life  would  be  impossible  were  it  not  for  the  corpora- 
tions. Whether  sleeping  or  waking,  engaged  in  busi- 
ness or  pleasure,  eating,  drinking,  dressing,  or  trav- 
eling, or  whatever  we  may  be  about,  we  must  thank 
them  to  a  great  extent  for  the  means  and  opportu- 
nity of  doing  so. 

The  reduction  in  the  price  of  articles  of  general 
consumption,  to  which  reference  has  been  made,  is 
due,  in  the  writer's  opinion,  to  two  causes  which  in 
their  operation  would  at  first  glance  seem  calculated 
to  produce  contrary  results,  but  which,  in  fact,  both 
tend  to  the  same  end.  These  two  causes  are  com- 
petition and  consolidation.  It  is  easy  to  see  how 
competition  between  two  or  more  concerns  engaged 
in  the  production  of  an  article  would  tend  to  lower 
its  price  until  a  point  should  be  reached  when  but  a 
narrow  margin  of  profit  would  remain.  The  con- 
solidation, on  the  other  hand,  of  all  the  competing 
concerns  engaged  in  the  same  business  would  seem 
to  tend  to  an  advance  in  the  price  of  the  commodity 
produced.  This  would  doubtless  be  the  case  at  first. 
But  experience  has  shown  that  there  is  more  money 
in  selling  a  large  quantity  at  a  small  profit  than  in 
selling  a  small  quantity  at  a  large  profit,  and  the 
application  of  this  principle  results,  as  has  been  said 
above,  in  the  ultimate  reduction  of  the  price.  A 
most  notable  instance  of  this  truth  is  to  be  found 
in  the  enormous  reduction  of  the  price  of  kerosene- 
oil  since  the  consolidation  into  one  company  of  the 
various  corporations  engaged  in  its  production. 

How  great  have  been  the  advantages  to  our 
commerce  and  our  country's  development  from  cor- 
porate organization  no  one  can  say.  Have  these 
advantages  been  to  some  extent  counterbalanced  by 


certain  evils?  The  concentration  of  wealth  in  the 
hands  of  corporations  has  had  the  effect  of  driving 
the  individual  producer  out  of  business.  In  the 
early  days  of  our  country's  existence  many  industries 
were  carried  on  in  the  towns  and  villages  by  skilled 
workmen  who  were  their  own  masters,  and  who 
were  in  business  for  themselves.  Tailors,  shoe- 
makers, weavers,  blacksmiths,  tinsmiths,  saddlers, 
and  many  other  manufacturers  on  a  small  scale 
carried  on  their  business  for  their  own  account,  and 
were  a  useful,  self-reliant,  and  manly  element  in  our 
population.  These  industries  are  now  to  a  great 
extent  monopolized  by  large  corporations,  and  the 
men  who  were  formerly  independent  in  their  busi- 
ness are  now  represented  by  salaried  workmen. 
The  gradual  extinction  of  this  class  of  men  of  mod- 
erate means  who  carried  on  their  business  for  their 
own  account  seems  to  be  a  distinct  loss  to  the  com- 
munity. 

In  the  earlier  days  of  the  history  of  this  country 
our  foreign  commerce  was  entirely,  or  almost  en- 
tirely, in  the  hands  of  individual  traders  and  private 
partnerships.  The  vessels  by  means  of  which  the 
trade  was  carried  on  were  owned  by  individuals, 
the  ownership  of  a  vessel  being  divided  sometimes 
among  a  number  of  persons,  the  captain  in  many 
cases  being  a  part  owner.  The  cargo  of  the  vessel, 
on  its  arrival  at  its  port  of  destination,  was  disposed 
of  by  the  captain  or  by  a  supercargo  for  the  benefit 
of  the  owners,  and  the  proceeds  invested  at  his  dis- 
cretion in  the  return  cargo.  This  method  of  doing 
business  afforded  a  good  field  for  the  exercise  of 
individual  skill,  and  the  profits  made  by  those  en- 
gaged in  it  were  far  in  excess  of  anything  that  can 
be  realized  by  traders  of  the  present  day.  The  sub- 
marine cables  going  to  all  parts  of  the  world,  owned 
by  corporations,  have  entirely  revolutionized  our 
foreign  trade.  Our  individual  ship  owners  have 
nearly  all  retired  from  the  business,  and  the  carrying 
trade  of  the  country  is  done  by  steam-vessels  owned 
by  corporations,  and,  sad  to  say,  nearly  all  of  them 
are  owned  by  foreign  capitalists  and  manned  by 
foreign  sailors.  No  doubt  the  greatest  good  of  the 
greatest  number  is  promoted  by  the  operation  of 
great  industries  in  corporate  hands.  The  cost  of 
living  is  reduced ;  but  the  disappearance  from  the 
ocean  of  American  ships  commanded  by  American 
skippers  and  manned  by  American  sailors  is  a  dis- 
tinct misfortune.  Whether  this  disappearance  can 
fairly  be  traced,  altogether  or  in  part,  to  the  influence 
of  corporate  organizations  is  a  question  which  can 
never  be  answered.  It  is  perhaps  partly  due  to  this 
cause  and  partly  to  other  causes,  just  as  the  concen- 


WILLIAM  JAY. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


tration  of  business  above  referred  to  in  the  hands  of 
large  corporations  and  wealthy  people  is  partly  due 
to  corporate  organizations  and  partly  to  the  improve- 
ments in  methods  and  machinery  introduced  by  the 
inventive  genius  of  modern  times. 

Another  evil  growing  out  of  the  great  develop- 
ment of  corporate  control  of  business  is  a  lower- 
ing of  the  standard  of  business  honor  and  business 
morality.  The  administration  of  the  affairs  of  cor- 
porations of  our  country  by  their  directors  has  in 
many  instances  been  unfair  to  the  stockholders,  and 
to  a  corresponding  extent  advantageous  to  the 
directors.  It  cannot  be  denied  that  many  large 
fortunes  have  been  made  by  men  who  availed 
themselves  of  the  knowledge  acquired  by  them  as 
directors  of  the  affairs  of  corporations  to  buy  and 
sell  the  shares  for  their  own  profit.  Many  a  director 
in  a  corporation  would  consider  it  preposterous  to 
be  told  that  he  had  no  right  to  trade  in  the  stock 
of  his  corporation,  and  yet  the  director  is  to  all  in- 
tents and  purposes  a  trustee  for  the  stockholders, 
and  ought  not,  any  more  than  any  other  trustee,  to 
trade  in  the  trust  estate.  More  than  this,  it  has  not 
been  at  all  uncommon  for  directors  to  engage  in 
transactions  with  their  own  company,  the  result  of 
which  has  been  greatly  to  their  own  advantage. 
How  many  railroad  companies  have  been  wrecked 
by  being  saddled  with  worthless  lines  with  which 
they  have  been  consolidated  ?  Many  other  instances 
might  be  cited  where  directors,  under  form  of  law, 
have  bled  the  corporations  for  which  they  were  act- 
ing. The  directorate,  for  instance,  of  some  great 
corporate  interest,  rightfully  active  within  a  certain 
field,  leases  in  the  form  of  privileges  certain  of  its 
functions  to  outside  corporations,  in  the  success  of 
which  its  members  are  concerned.  Valuable  con- 
cessions, involving  thousands  of  annual  revenue,  are 
granted  for  the  most  nominal  considerations,  and 
the  tributary  companies  wax  rich  and  pay  large 
dividends,  while  the  great  corporation  whose  reve- 
nues are  thus  diverted  from  its  stockholders  pays 
none  at  all,  and  its  only  beneficiaries  are  found 
among  the  directors,  who  have  thus  misused  their 
power  for  their  own  ends. 

Vast  sums  of  money,  American  and  foreign  cap- 
ital, have  been  invested  in  enterprises  in  this  coun- 
try under  corporate  control.  A  great  deal  of  this 


money  has  been  lost  to  the  investor  forever.  Some 
of  it  has  gone  because  the  project  in  its  inception 
was  ill  considered,  and  the  blame  must  rest  upon 
the  poor  judgment  of  the  investor;  but  too  many 
schemes  have  been  floated  by  corporations  con- 
ceived in  fraud,  through  which  confiding  investors 
have  been  fleeced.  A  common  form  of  swindle  is 
an  issue  of  bonds  secured  upon  nothing  but  a  fran- 
chise that  has  cost  the  corporation  nothing.  A 
fraction  of  the  proceeds  may  be  used  in  construc- 
tion ;  the  balance  may  be,  and  often  has  been,  dis- 
tributed among  the  promoters.  An  allusion  to  this 
form  of  corporate  dishonesty  is  all  that  space  admits 
of ;  were  it  not  so,  it  would  be  instructive  to  refer 
here  at  some  length  to  the  common  device  of 
dishonest  directors  who  contract  with  so-called  con- 
struction companies  in  which  they  are  themselves 
the  shareholders,  thereby  reaping  a  dishonest  profit. 

The  power  of  corporate  organization  has  been 
invoked  to  work  great  hardship  and  wrong  in  many 
cases  to  the  towns  and  cities  throughout  the  coun- 
try. Franchises  of  enormous  value — especially  the 
right  to  use  the  streets  for  elevated  and  surface 
roads — have  been  obtained  for  a  most  inadequate 
consideration.  This  abuse  of  power  by  corporations 
has  been  demoralizing  in  its  tendency  and  mischiev- 
ous in  its  results.  It  is  impossible  to  compare  our 
great  cities  with  those  of  Europe  without  feeling 
that  ours  have  been  vulgarized,  degraded,  and  ren- 
dered hideous  by  the  appropriation  of  their  princi- 
pal streets  by  private  corporations  for  private  greed. 
It  is  idle  to  say  that  public  convenience  requires 
that  hideous  structures  like  the  elevated  railroad 
should  exist,  or  that  cable-cars  should  be  run  on  the 
surface  of  our  principal  thoroughfares.  It  is  not  so. 
It  is  not  so  in  any  other  civilized  country  on  earth, 
and  would  not  be  tolerated  in  any  other  civilized 
country.  Perhaps  we  are  not  so  highly  civilized  as 
we  think  we  are. 

The  corporation  is  a  tremendous  power  with  us, 
both  for  good  and  evil.  It  is  probable  that  as  time 
goes  on  its  powers  will  increase  rather  than  diminish. 
By  its  means  cheaper  living,  more  comfort,  and 
greater  luxury  will  be  brought  within  the  reach  of 
us  all.  Let  us  hope  that  a  higher  plane  of  business 
honor  may  be  reached  in  the  management  of  our 
corporations. 


CHAPTER    IX 

COMMERCIAL   ORGANIZATIONS 


IN  the  early  part  of  the  present  century  the 
commercial  organizations  then  existing  which 
had  any  material  influence  upon  the  home  and 
foreign  commerce  of  the  nations  of  the  earth  were 
exceedingly  limited  in  number.  Indeed  it  is  doubt- 
ful if  at  that  period  there  were  more  than  fourteen, 
viz.,  three  in  Great  Britain,  seven  in  France,  and 
four  in  the  United  States.  All  of  these,  save  two 
notable  exceptions, — the  Board  of  Trade  of  England 
and  the  Council  General  of  Commerce  of  Paris, — 
were  largely  synonymous  in  their  vocations  and 
operations. 

In  France  Chambers  of  Commerce  had  been  in- 
stituted at  a  very  early  date — notably  at  Marseilles, 
at  the  close  of  the  fourteenth  or  the  beginning  of 
the  fifteenth  century;  at  Dunkirk,  in  1700;  at 
Paris,  in  the  same  year;  at  Lyons,  in  1702;  at 
Rouen  and  Toulouse,  in  1703;  at  Montpellier,  in 
1704;  and  at  Bordeaux,  in  1705.  While  England 
had  her  Board  of  Trade  as  early  as  1660,  it  was  not 
until  1786  that  the  present  department  was  estab- 
lished in  Council,  being  a  permanent  committee  of 
the  Privy  Council  for  the  consideration  of  all  mat- 
ters relating  to  trade  and  the  colonies,  with  functions 
partly  ministerial  and  partly  judicial.  Of  Chambers 
of  Commerce,  Great  Britain  then  had  but  two :  that 
of  Glasgow,  instituted  in  1783,  and  of  Edinburgh, 
founded  in  1785,  and  incorporated  by  royal  charter 
in  1786. 

In  the  United  States  the  oldest  existing  Chamber 
of  Commerce  is  that  of  New  York,  organized  in 
1768,  and  incorporated  by  royal  charter  in  1770. 
Shortly  afterward  a  second  was  established  at  New 
Haven,  Conn. ;  another  at  Charleston,  S.  C.,  about 
1775  ;  and  that  in  Philadelphia  in  1802.  It  is  true 
that  New  York  about  this  time  had  also  a  Board  of 
Brokers,  organized  about  1792  or  1793,  and  had 
erected  the  Tontine  Coffee-House,  where  merchants 
and  others  met  and  discussed  mercantile  and  semi- 
commercial  questions. 


The  Chamber  of  Commerce  of  New  York  is  in 
some  respects  not  only  the  forerunner  but  the  type 
of  many  like  institutions  which  have  been  organized 
in  our  leading  cities,  representing,  both  locally  and 
otherwise,  our  multiplying  and  diversified  industrial 
interests.  In  some  instances,  however,  it  essentially 
differs  from  other  kindred  institutions,  since,  while 
caring  for  local  welfare,  it  is  also  broadly  national 
in  its  sympathies  and  work.  In  this  connection  it 
may  be  interesting  to  trace  back  this  time-honored 
organization  to  the  names  of  the  old  and  respected 
merchants  who  founded  it.  They  were :  John 
Cruger,  Elias  Desbrosses,  James  Jauncey,  Jacob 
Walton,  Robert  Murray,  Hugh  Wallace,  George 
Folliot,  William  Walton,  Samuel  Verplanck,  Theo- 
phylact  Bache,  Thomas  White,  Miles  Sherbrook, 
Walter  Franklin,  Robert  Ross  Waddell,  Acheson 
Thompson,  Lawrence  Kortwright,  Thomas  Randal, 
William  McAdam,  Isaac  Low,  Anthony  Van  Dam, 
John  Alsop,  Philip  Livingston,  Henry  White,  and 
James  McEvers.  It  also  may  not  be  out  of  place 
to  reproduce  the  original  terms  used  in  its  formal 
organization,  reciting  its  usefulness  as  follows: 
"WHEREAS,  Mercantile  societies  have  been  found 
very  useful  in  trading  cities  for  promoting  and  en- 
couraging commerce,  supporting  industry,  adjusting 
disputes  relative  to  trade  and  navigation,  and  pro- 
curing such  laws  and  regulations  as  may  be  found 
necessary  for  the  benefit  of  trades  in  general.  .  .  ." 

Of  the  history  and  character  of  the  persons  who 
are  here  recorded  as  the  original  founders  of  this 
Chamber  the  memories  of  the  present  generation 
will  not  be  wholly  oblivious.  The  first  public  place 
of  meeting  of  the  original  Chamber  was  at  the  house, 
now  standing,  on  the  corner  of  Pearl  and  Broad 
streets.  This  building  had  been  originally  erected 
as  a  town  residence,  and  had  undergone  many  alter- 
ations in  size  and  form.  During  the  period  of 
Washington's  first  residence  in  this  city  it  was  chiefly 
remarkable  as  being  a  public  tavern,  where  in  later 


50 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


'•I 


days  Washington  was  entertained  and  took  his  fare- 
well of  the  officers  of  the  army  on  his  departure  for 
his  home  in  Virginia  at  the  close  of  the  Revolution- 
ary War.  The  subsequent  meetings  of  the  Chamber 
were  held,  first,  in  1769,  in  the  "great  room  of  the 
building  commonly  called  the  '  Exchange,'  at  the 
lower  end  of  the  street  called  Broad  " ;  afterward,  in 
1779,  at  the  Merchants'  Coffee-House,  on  the  south- 
east corner  of  Wall  and  Water  streets ;  in  1 8 1 7  at 
the  Tontine  Coffee-House,  on  the  northwest  corner 
of  Wall  and  Water  streets;  in  1827  in  the  original 
Merchants'  Exchange  (in  a  room  specially  set  apart 
for  the  purpose),  until  that  building  was  destroyed 
by  fire  in  1835;  then  for  a  time  in  the  directors' 
room  of  the  Merchants'  Bank  on  Wall  Street ;  then 
in  premises  on  the  corner  of  William  and  Cedar 
streets,  where  the  Chamber  remained  for  many 
years  prior  to  its  final  removal  to  its  present  com- 
modious quarters  on  Nassau  Street. 

At  the  close  of  the  Revolution  the  legislature  of 
New  York  passed  an  act  (on  the  i3th  of  April, 
1784)  "to  remove  doubts  concerning  the  corpora- 
tion of  the  Chamber  of  Commerce,  and  to  confirm 
the  rights  and  privileges  thereof."  Under  this  act 
the  title  was  changed  from  the  "  Chamber  of  Com- 
merce "  to  the  "  Chamber  of  Commerce  of  the  State 
of  New  York."  From  the  earlier  days  down  to  the 
present  period  the  membership  has  been  principally 
confined  to  citizens  engaged  in  finance  and  com- 
merce, although  at  different  times  our  records  show 
that  public  officers  of  the  highest  rank,  including 
presidents,  governors,  Senators,  Congressmen,  for- 
eign ministers,  and  members  of  the  State  legislature, 
have  been  either  honorary  or  regular  members  of 
the  Chamber  of  Commerce.  In  the  earlier  steps 
taken,  almost  a  century  ago,  to  form  a  code  of 
commercial  laws  and  regulations,  the  most  prominent 
merchants  of  that  era  determined  and  bound  them- 
selves reciprocally  to  prevent  "  the  scandalous  prac- 
tice of  smuggling."  Within  two  years  after  the 
evacuation  of  the  city  of  New  York  by  the  British 
a  strong  effort  was  made  in  the  new  State  legisla- 
ture to  adopt  a  plan  for  issuing  paper  money,  to  be 
made  by  law  a  legal  tender  in  the  transaction  of 
business.  A  memorial  was  adopted  by  the  Cham- 
ber, setting  forth  in  the  most  forcible  terms  the  evils 
and  immorality  of  such  an  issue,  and  through  its  in- 
fluence the  proposed  measure  was  defeated.  It  may 
be  safely  alleged  that  to  the  good  sense  and  active 
management  of  the  Chamber  may  be  attributed  the 
policy  which  the  general  government  adopted  at 
this  period  of  peril,  whereby  the  credit  of  the  nation 
was  maintained.  At  an  early  period  in  the  active 


movements  of  the  Chamber,  in  January,  1786,  a 
resolution  was  considered  asking  the  assistance  of 
the  legislature  of  New  York  for  the  creation  of  a 
fund  to  connect  the  city  of  New  York  by  artificial 
navigation  with  the  lakes.  This  action  clearly  con- 
nects the  sentiments  of  the  Chamber  of  that  early 
day  with  the  great  purpose  of  Governor  Clinton  for 
the  construction  of  the  Erie  Canal.  A  few  years 
later  we  find  the  Chamber  entertaining  the  project 
for  the  construction  of  a  ship-canal  around  Niagara 
Falls,  and  a  railroad  from  Lake  Erie  to  the  Hudson 
River. 

The  question  of  tribunals  of  commerce  was  also 
considered  at  several  periods  of  its  history ;  but  the 
legislature  was  not  friendly  to  this  new  departure  in 
commercial  jurisprudence  until  1874,  when  an  act 
was  passed  establishing  a  court  of  arbitration,  to  be 
presided  over  by  a  judge  appointed  by  the  gover- 
nor ;  and  this  court  continues  to  this  day.  Another 
highly  important  subject  had  from  time  to  time 
occupied  the  attention  of  the  Chamber,  that  of 
the  pilot  laws  of  New  York  and  New  Jersey,  result- 
ing in  the  present  excellent  system.  At  the  annual 
meeting  in  1848  the  Chamber  took  formal  measures 
to  assist  in  organizing  a  savings  bank  for  the  benefit 
of  "  merchants'  clerks  and  others  " ;  and  a  charter 
was  granted  by  the  legislature  as  the  result  of  this 
thoughtful  action,  and  since  then  this  institution  has 
grown  to  be  one  of  the  most  successful  of  similar 
organizations  in  the  country.  In  1849  tne  Chamber 
was  interested  in  Whitney's  project  for  the  construc- 
tion of  a  Pacific  railroad  across  the  continent,  and 
a  report  favoring  its  construction  was  unanimously 
adopted  and  forwarded  to  Congress.  It  was  also 
instrumental  in  getting  the  United  States  govern- 
ment to  remove  the  sunken  rocks  from  the  channel 
of  the  East  River  and  to  widen  the  passage  through 
Hell  Gate.  In  1852  the  Chamber  took  active  mea- 
sures in  regard  to  the  reciprocity  agreement  with 
the  North  American  provinces  for  the  free  inter- 
change of  the  natural  productions  of  the  respective 
countries,  embracing  also  a  full  and  joint  participa- 
tion in  the  fisheries  and  the  free  navigation  of  the 
river  St.  Lawrence.  It  also  repeatedly  declared  its 
sentiments  on  the  subject  of  privateering,  and  has 
at  all  times  maintained  its  inviolable  determination 
to  adhere  rigidly  to  the  principles  avowed  by  the 
government  of  the  United  States. 

The  treaty  negotiated  with  Japan  by  Commodore 
Perry,  in  behalf  of  the  United  States,  opened  up  a 
new  pathway  to  commerce  with  an  almost  unknown 
nation,  and  the  Chamber  took  a  prominent  part  in 
giving  signal  testimony  of  its  appreciation  of  that 


52 


ONE  HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


officer's  conduct  in  a  graceful  gift  of  a  silver  service 
of  plate.  At  a  special  meeting  of  the  Chamber,  held 
the  2ist  of  August,  1858,  the  successful  result  of  the 
united  efforts  of  the  English  and  American  nations 
to  lay  the  first  Atlantic  telegraph-cable  to  connect 
the  continent  of  the  Old  World  with  the  New  was 
announced,  and  the  sum  of  $10,000  was  appropri- 
ated and  applied  to  the  presentation  of  gold  medals 
to  the  prominent  officers  engaged  in  carrying  out 
the  -nterprise.  At  the  meeting  of  the  Chamber, 
September  6,  1860,  the  following  resolution  was 
adopted :  "Resolved,  That  in  the  judgment  of  this 
Chamber  an  urgent  necessity  exists  for  the  establish- 
ment, at  an  early  day,  of  mail  facilities  between  the 
cities  of  San  Francisco  in  California  and  Shanghai 
in  China,  with  connections  at  such  intermediate 
ports  as  the  interests  of  commerce  may  indicate." 
It  seems  hardly  necessary  to  add  that  the  above  is 
the  germ  from  which  has  sprung  the  magnificent 
line  of  American  steamships  which  traverses  the 
Pacific  Ocean  to-day. 

A  remarkable  epoch  in  the  affairs  of  this  country, 
and  one  especially  affecting  all  its  business  interests, 
occurred  shortly  after  this  period.  The  Southern 
States  of  the  Union  had  united  in  revolt  against  the 
government,  and  the  President  had  issued  his  proc- 
lamation calling  for  military  aid.  The  Chamber 
responded  to  this  appeal  by  holding  a  large  and 
enthusiastic  meeting  on  April  19,  1861,  at  which 
an  ample  sum  of  money  was  raised  to  forward  at 
once  for  the  defense  of  the  national  capital  two 
regiments  of  the  State  National  Guard,  and  also  to 
organize  several  additional  regiments  of  volunteers, 
who  left  shortly  afterward  for  the  seat  of  war.  At 
this  meeting  attention  was  called  to  the  fact  that 
a  part  of  the  advertised  loan  of  the  government 
remained  untaken.  A  special  committee  was  ap- 
pointed, and  the  balance,  amounting  to  $8,000,000, 
was  at  once  subscribed,  and  the  Treasury  Depart- 
ment notified  that  the  same  could  be  drawn  for  at 
once.  The  great  mass-meeting  at  Union  Square- 
now  a  matter  of  history— and  the  Union  Defense 
Committee  were  the  outcome  of  the  action  of  the 
Chamber.  The  valuable  aid  rendered  to  the  gov- 
ernment by  this  committee,  composed,  as  it  was, 
mainly  of  merchants  and  bankers  of  New  York,  was 
frequently  acknowledged  by  the  highest  military 
authorities,  and  sixty-six  regiments  were  equipped 
and  fitted  for  service  and  forwarded  in  the  early 
stages  of  the  war,  as  standing  evidences  of  its  loyalty 
and  efficiency. 

At  a  special  meeting  of  the  Chamber  held  on 
May  15,  1872,  "to  give  expression  to  the  views  of 


the  Chamber  on  the  Treaty  of  Washington  (result- 
ing in  the  Geneva  award  arbitration),  and  to  urge 
the  ratification  by  the  Senate  of  an  additional  article 
thereto,  as  proposed  by  Minister  Schenck,"  the  fol- 
lowing preamble  and  resolutions  were  adopted : 

"  WHEREAS,  The  Treaty  of  Washington,  referring 
the  differences  between  this  country  and  Great 
Britain  to  arbitration,  has  justly  been  regarded  as  a 
measure  of  great  importance  to  the  interests  of  civ- 
ilization and  peace,  and  the  honor  of  proposing  it 
belongs  to  this  country;  and 

"WHEREAS,  Differences  of  opinion  have  arisen 
between  the  governments  of  the  two  countries  re- 
specting the  proper  construction  of  the  treaty  in 
regard  to  the  claims  for  indirect  damages,  and  a 
supplemental  article  for  settlement  of  those  differ- 
ences has  been  proposed  by  the  government  of 
Great  Britain,  and  by  the  President  laid  before  the 
Senate  for  its  advice,  which  article  appears  to  this 
Chamber  to  be  sound  in  principle,  binding  the  two 
governments  to  the  adoption  of  a  beneficent  rule  for 
the  future,  and  especially  beneficial  to  the  United 
States  and  its  commerce ;  and 

"  WHEREAS,  The  failure  of  the  treaty  would  be  a 
great  public  calamity ;  therefore 

"Resolved,  That  this  Chamber,  without  meaning 
thereby  to  imply  that  our  government  has  at  all 
erred  in  its  construction  of  the  treaty,  and  believing 
that  the  supplemental  article  is  more  than  an  equiv- 
alent for  the  claims  of  our  government  as  originally 
presented,  and  feeling  the  importance  of  removing 
all  obstacles  in  the  way  of  the  execution  of  the 
treaty,  earnestly  recommends  the  adoption  of  the 
supplemental  article,  and  prays  the  Senate  to  ratify 
it." 

As  the  Senate  was  "  hanging  fire  "  in  regard  to 
the  ratification  of  this  treaty,  and  war  between  the 
two  countries  was  apparently  imminent,  the  action 
of  the  Chamber  in  this  matter  was  not  only  timely 
and  praiseworthy,  but  also  wise,  patriotic,  and  in- 
fluential, as  the  sequel  showed. 

Thus  it  will  be  seen  that  to  outline  the  history 
and  operations  of  the  New  York  Chamber  of  Com- 
merce is  largely  to  portray  the  political,  commer- 
cial, industrial,  and  financial  development  of  the 
country  ;  for  really  no  great  politico-economic  ques- 
tion has  arisen  in  the  United  States  from  the  War 
of  1812—15  *°  the  present  time  in  which  it  has  not 
been  vitally  and  patriotically  interested.  The  fore- 
going are,  however,  but  few  of  the  services  which  it 
has  so  signally  performed.  It  has  been  concerned 
in  nearly  everything  which  related  to  the  commer- 
cial welfare  and  prosperity  not  only  of  the  city  and 


ALEXANDER  E.  ORR. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


State  of  New  York,  but  also  of  the  country  at  large, 
of  which  it  is  in  a  measure  the  commercial  guardian. 

The  class  of  people  who  possessed  the  most 
means  and  experience  before  and  immediately  after 
the  Revolution  were  the  merchants  and  ship  owners, 
and  they  were  the  first  to  perceive  the  advantages 
and  value  of  mercantile  or  commercial  organizations, 
which,  as  already  outlined,  they  perfected  in  New 
York,  New  Haven,  Charleston,  and  Philadelphia. 
These  commercial  bodies  were  the  initial  organiza- 
tions of  the  kind  in  America.  Their  foundations 
were  broad  and  deep,  and  each  in  its  way  and  time 
performed  substantial  service  for  the  public  good, 
both  local  and  general.  The  Chamber  of  Com- 
merce of  Baltimore,  instituted  in  the  early  decades 
of  the  century,  but  subsequently  reorganized  as  the 
Board  of  Trade,  still  continues  its  usefulness.  The 
Merchants'  Exchanges  of  New  York  and  Philadel- 
phia, which  were  founded  at  an  earlier  date,  have 
passed  away,  probably  from  having  been  too  heavily 
handicapped  at  first  with  expensive  buildings  and  in- 
adequate revenues. 

Succeeding  the  War  of  1812-15,  an<3  later,  other 
Chambers  of  Commerce,  Exchanges,  and  Boards 
of  Trade  were  organized  in  various  cities  of  the 
Union,  which  also  have  done  much  toward  develop- 
ing the  industries,  trade,  and  traffic  of  their  locali- 
ties, as  well  as  taking  more  or  less  active  part  in 
promoting  the  general  commercial  welfare  of  the 
country.  But  the  commercial  associations  which 
are  the  most  numerous,  and  withal  the  strongest,  are 
those  founded  by  people  who  deal  in  like  things  in 
towns  or  cities  which  are  to  some  extent  centers  of 
particular  callings,  such  as  cotton  in  New  Orleans, 
leather  or  wool  in  Boston,  iron  in  Philadelphia, 
crockery  in  Trenton,  paper  in  Holyoke,  or  print 
cloths  in  Fall  River  or  Providence.  Among  the 
earliest  of  the  general  Boards  of  Trade  which  still 
retain  their  vitality,  and  form  an  important  element 
in  the  town  or  city  in  which  they  are  located,  is  the 
Chicago  Board  of  Trade,  which  came  into  existence 
on  March  13,  1848,  but  did  not  begin  business  until 
May  2, 1850.  From  the  beginning  it  has  been  an  im- 
portant center  for  grain,  animal-food  products,  and 
lumber.  Similar  boards  were  established  in  Detroit, 
Milwaukee,  Cincinnati,  St.  Louis,  Toledo,  Minne- 
apolis, and  other  Western  cities.  That  in  St.  Louis 
is  also  an  important  center  for  the  cotton  trade. 
Smaller  organizations  exist  in  towns  numbering  less 
than  10,000  inhabitants,  and  have  proved  valuable 
adjuncts  by  the  infusion  of  greater  local  pride  and 
energy  among  their  citizens. 

Next  to  the  New  York  Chamber  of  Commerce  is 


the  Associated  Board  of  Trade  of  Boston.  Thi»  u 
probably  the  best  representative  body  among  strictly 
business  associations  in  this  country.  Founded  on 
a  new  idea  or  plan,  it  has  so  demonstrated,  during 
the  few  years  of  its  existence,  its  great  practicability 
and  usefulness  as  to  become  the  exemplar  of  the 
newer  Boards  of  Trade  throughout  the  country. 
The  Boston  Associated  Board  of  Trade  is  not  a 
promiscuous  grouping  of  business  men  coming  to- 
gether as  individuals,  but  is  made  up  of  delegates 
from  the  various  regularly  organized  trade  associa- 
tions of  that  city,  these  representatives  being  duly 
elected  by  their  own  organizations,  and  attending 
the  Associated  Board  of  Trade  meetings,  to  speak 
and  act  not  only  for  themselves,  but  as  voicing  the 
wishes  of  the  associations  which  send  them.  Thus, 
when  the  members  of  the  Associated  Board  of 
Trade  make  a  decision,  their  action  is  at  once  of 
importance  (because  of  its  comprehensiveness)  in 
forming  commercial  and  legislative  opinion. 

As  New  York  is  the  commercial  metropolis  of  the 
United  States,  her  merchants,  of  necessity,  must  be 
equally  comprehensive  in  their  dealings  not  only  in 
home  products,  but  also  in  those  of  all  other  coun- 
tries with  whom  they  hold  commercial  relations. 
To  facilitate  the  operation  of  this  great  concentra- 
tion of  business  it  was  found  expedient  to  organize 
separate  Exchanges  and  Boards  of  Trade,  which  as 
time  passed  have  grown  into  large  proportions.  It  is 
impossible  in  this  short  article  to  describe  them  all, 
— some  seventy  in  number, — but  a  few  of  the  more 
prominent  may  be  mentioned.  The  New  York 
Produce  Exchange,  with  its  3000  members,  specially 
deals  in  grain,  flour,  provisions,  lard,  tallow,  etc. 
It  possesses  the  finest  exchange  building  in  the 
United  States,  and  its  business  and  influence  are 
proportionally  great  in  the  line  of  its  specialties. 
The  Stock  Exchange  confines  its  dealings  to  stocks 
and  bonds  and  other  similar  securities  of  this  and 
other  countries,  and  has  given  great  impetus  to  the 
development  of  transportation  in  this  country.  The 
Cotton  Exchange,  which  deals  almost  exclusively  in 
that  staple,  buys  and  sells  more  cotton  for  future 
delivery  than  any  other  Cotton  Exchange  either  at 
home  or  abroad.  The  Petroleum— now  the  Con- 
solidated—  Exchange  first  dealt  in  petroleum  and 
mineral  oils,  but  of  late  years  it  has  turned  its  atten- 
tion to  stock  securities,  and  is  to  some  extent  a 
competitor  of  the  Stock  Exchange.  The  Coffee 
Exchange  has  lately  grown  into  very  great  promi- 
nence, and  now  surpasses  in  the  volume  of  its  busi- 
ness that  of  Havre,  France,  which  is  believed  to  be 
the  largest  in  Europe.  The  Merchants'  Exchange 


54 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


confines  its  operations  to  farm  products,  such  as 
butter,  cheese,  eggs,  poultry,  and  the  like,  and  now 
aggregates  an  enormous  business.  The  Wool  Ex- 
change and  the  Metal  Exchange  are  other  important 
associations,  which,  with  the  foregoing,  own  their 
buildings ;  but  besides  these  there  are  the  Maritime 


ber  of  such  organizations  throughout  the  whole  coun- 
try will  probably  reach  2000. 

The  national  and  trade  associations  probably 
aggregate  in  number  over  one  hundred.  Following 
is  a  list  of  prominent  national  organizations,  and 
their  leading  officers  at  the  present  time : 


NATIONAL  COMMERCIAL  ASSOCIATIONS. 


NAME. 


LOCATION. 


PRESIDENT. 


SECRETARY. 


American  Association  of  Flint  and  Lime  Glass  Manu-  ? 

facturers _ 5 

American  Boiler  Manufacturers'  Association  of  the 

United  States  and  Canada 5 

American  Iron  and  Steel  Association 

Association  of  Iron  and  Steel  Sheet  Manufacturers 

Carriage  Builders'  National  Association 

Heavy  Hardware  Jobbers'  National  Union 

Manufacturers'  National  Association  

Merchant  Tailors'  National  Exchange  of  the  United  J 

States 5 

Millers'  National  Association  of  the  United  States 

National  Association  of  Builders 

National  Association  of  Furniture  Manufacturers 

National  Association  of  Galvanized  Sheet-Iron  Manu-  ) 

facturers 5 

National  Association  of  Stove  Manufacturers 

National  Association  of  Wool  Manufacturers 

National  Board  of  Trade 

National  Board  of  Trade  of  Cycle  Manufacturers 

National  Brick  Manufacturers'  Association  of  the  ? 

United  States J 

National  Cigar  Manufacturers'  Association 

National  Confectioners'  Association 

National  Dairy  Union 

National  Hardware  Association 

National  Iron  Roofing  Association 

National  Live  Stock  Exchange 

National  Paint,  Oil,  and  Varnish  Association 

National  Retail  Grocers'  Association 


National  Retail  Hardware  Dealers'  Association 

National  Retail  Jewelers'  Association  of  the  United  ? 

States J 

National  Transportation  Association 

National  Wholesale  Druggists'  Association 

Tinned  Plate  Manufacturers'  Association  of  the  ? 

United  States  j 

United  States  Brewers'  Association 

Vapor  Stove  Manufacturers'  Association 

Vessel  Owners'  and  Captains'  National  Association  . . . 


Pittsburg,  Pa. 

St.  Louis,  Mo 

Philadelphia,  Pa. . . 

Pittsburg,  Pa 

Philadelphia,  Pa. . . 

Chicago,  III 

Cincinnati,  O 

New  York 

Milwaukee,  Wis. . . 

Boston,  Mass 

Indianapolis,  Ind.  . 

Pittsburg,  Pa 

Chicago,  111 

Boston,  Mass 

Boston,  Mass 

Hartford,  Conn. . . . 

Indianapolis,  Ind.. 
New  York,  N.  Y.  . 

St.  Louis,  Mo 

Elgin,  111 

Philadelphia,  Pa. . . 

Cincinnati,  O 

Chicago,  111 

Chicago,  111 

Chicago,  111 

Boston,  Mass 

St.  Louis,  Mo 

Chicago,  III 

Minneapolis,  Minn. 

Pittsburg,  Pa 

New  York,  N.  Y.  . , 
Cleveland,  O 

Boston,  Mass 


George  W.  Blair,  Pittsburg,  Pa. 
H.  S.  Robinson,  Boston,  Mass. 

B.  F.  Jones,  Pittsburg,  Pa. 

J.  G.  Battelle,  Piqua,  O. 
Channing  M.  Britton,  New  York. 

S.  D.  Kirnbart,  Chicago. 
Thomas  Dolan,  Philadelphia. 
Emile  Twyeffort,  New  York. 

C.  A.  Pillsbury,  Minneapolis,  Minn. 
Charles  A.  Rupp,  Buffalo,  N.  Y. 
Otto  Strechhlan,  Indianapolis,  Ind. 

N.  S.  Whitaker,  Wheeling,  W.  Va. 

Lazard  Kahn,  Hamilton,  O. 
William  H.  Haile,  Springfield,  Mass. 
Frederick  Fraley,  Philadelphia,  Pa. 
A.  G.  Spalding,  New  York. 

F.  H.  Eggers,  Cleveland,  O. 
Moses  Krohn,  Cincinnati,  O. 
John  S.  Gray,  Detroit,  Mich. 

W.  D.  Hoard,  Fort  Atkinson,  Wis. 

<  William  W.  Supplee,  503  Market 

<  St.,  Philadelphia,  Pa. 

James  Beichele,  Canton,  O. 

W.  H.  Thompson,  Jr.,  Chicago,  111. 

<  Howard  B.  French,  Philadelphia, 

i     Pa- 

George  A.  Shurer,  Peoria,  IU. 

S.  S.  Bryan,  Titusville,  Pa. 
Herman  Mauch,  St.  Louis,  Mo. 

Frank  Barry,  Milwaukee,  Wis. 
J.  C.  Eliel,  Minneapolis,  Minn. 

W.  T.  Graham,  Bridgeport,  O. 

Leo  Ebert,  Ironton,  O. 
C  Hon.  D.  Dangler,  Dangler  Stove 
\     Mfg.  Co.,  Cleveland,  O. 

J.  S.  Winslow,  Portland,  Me. 


George  F.  Easton,  Pittsburg,  Pa. 

C  E.  D.  Meier,  421  Olive   St.,  St. 
(      Louis,  Mo. 

C  James    M.    Swank,   Gen.   Man 
I      Philadelphia,  Pa. 
John  Jarrett,  Pittsburg,  Pa. 
Henry  C.  McLear,Wilmington,Del. 
5  W.  C.  Brown,  45  La  Salle  St,  Chi- 
_>      cago,  111. 

E.  P.  Wilson.  Cincinnati,  O. 

James  S.  Burbank,  New  York. 

Frank  Barry,  Milwaukee,  Wis. 
William  H.  Say  ward,  Boston,  Mass. 
T.  B.  Laycock,  Indianapolis,  Ind. 

John  Jarrett,  Pittsburg,  Pa. 

T.  J.  Hogan,  Chicago,  111. 
S.  N.  D.  North,  Boston,  Mass. 
W.  R.  Tucker,  Philadelphia,  Pa. 
A.  Kennedy  Child,  Hartford,  Conn. 
C  Theo.    A.   Randall,  5  Monument 
\      Place,  Indianapolis,  Ind. 
Morris  S.  Wise,  New  York. 
C  F.  D.   Seward,  525  North  Main 
)      St.,  St.  Louis,  Mo. 
D.  W.  Willson,  Elgin,  111. 
T.   James  Fernley,   505  Commerce 

St.,  Philadelphia,  Pa. 

George  M.  Verity,  care  American 
Roofing  Co.,  Cincinnati,  O. 

arles  W.  Baker,  Chicago,  111. 

!•  D.  Van  Ness  Person,  Chicago,  III 

W.  M.  Crawford,  Chicago,  111. 
Hiram  G.  Janvrin,  9  Dock  Square, 

Boston,  Mass, 
illiam  F.  Kemper,  St.  Louis,  Mo. 

George  F.  Stone,  Chicago,  111. 

A.  B.  Merriam,  Minneapolis,  Minn. 

John  Jarrett,  Pittsburg,  Pa. 

Richard  Katzenmayer,  New  York. 

F.  L.  Alcott,  Standard  Lighting  Co., 
Cleveland,  Ohio. 

C  R.    R.    Freeman,  95  Commercial 
)      St.,  Boston,  Mass. 


i: 


Exchange,  the  Board  of  Trade  and  Transportation, 
the  Coal  Exchange,  the  Mechanics'  Exchange,  and 
many  more  with  names  indicative  of  their  trade  spe- 
cialties, which  have  organized  from  time  to  time  as 
the  city  developed. 

The  approximate  numbers  of  the  various  commer- 
cial associations  located  in  the  principal  cities,  not 
previously  enumerated,  are  as  follows :  Philadelphia, 
20;  Boston,  48;  Pittsburg,  n  ;  Baltimore,  21 ;  San 
Francisco,  15;  Indianapolis,  8;  Louisville,  9;  New 
Orleans,  n  ;  Minneapolis,  12 ;  Kansas  City,  9;  St. 
Louis,  26  ;  Omaha,  9  ;  Buffalo,  16  ;  Cincinnati,  17 ; 
Cleveland,  9  ;  Milwaukee,  10 ;  and  the  entire  num- 


Thus  it  will  be  seen  that,  starting  with  but  four 
commercial  organizations,  of  the  character  and  scope 
outlined,  at  the  beginning  of  the  nineteenth  century, 
their  number  at  its  close  will  have  increased  five 
hundred  fold.  What  they  have  accomplished  for 
the  people  of  this  country  is  simply  incalculable. 
The  record  is  found  in  our  extensive  manufacturing 
industries ;  in  the  products  of  the  soil,  forests,  and 
mines ;  in  our  enormous  interstate  commerce ;  in 
our  foreign  trade ;  in  our  circulating  medium  and 
monetary  institutions ;  and,  finally,  in  the  unprece- 
dented increase  in  national  wealth,  prosperity,  and 
development. 


CHAPTER  X 


ONE  HUNDRED  YEARS  OF  NEW  YORK  COMMERCE 


INEVITABLE  from  the  first  as  was  the  suprem- 
acy of  New  York  in  the  commerce  of  the  Western 
world,  her  preeminence  to-day  has  largely  been 
attained  along  the  lines  of  her  own  endeavor.    Com- 
peting in  the  open  fields  of  enterprise  and  trade,  she 
fairly  won  the  wealth  that  has  rendered  possible  the 
ever-increasing  magnitude  of  her  operations.     Her 
later  progress  is  linked  to  that  of  the  nation  by  the 
double  and  indissoluble  bond  of  cause  and  effect. 

To  the  geographical  location  of  New  York  have 
been  attributed,  and  to  a  certain  extent  justly,  the 
great  advantages  she  enjoys  over  every  other  city 
on  the  Atlantic  seaboard.  Her  harbor  is  one  of  the 
largest  and  safest  in  the  world.  It  is  never  closed 
by  ice,  and  is  always  easy  of  access.  Situated  at 
the  mouth  of  that  great  inland  waterway,  the  Hud- 
son, the  island  of  Manhattan  affords  a  shore  front 
capable  of  docking  the  navies  of  the  world,  while 
Long  Island  Sound,  a  miniature  Mediterranean, 
stretches  far  away  to  the  east.  Great  trunk-lines, 
tapping  the  vast  resources  of  every  part  of  the  coun- 
try, bring  here  the  products  which  are  later  distrib- 
uted over  the  whole  habitable  globe.  This  is  the 
condition  of  affairs  to-day ;  but  there  was  an  era, 
prior  to  the  railroads,  when  small  vessels  of  far  lighter 
draft  demanded  spacious  harbors,  and  when,  the 
manufacturing  interests  of  the  country  being  unde- 
veloped, natural  products  alone  sought  the  markets 
of  the  world. 

This  was  the  time,  a  century  ago,  when  New  York 
won  her  spurs.  With  a  population  of  about  50,000, 
she  held  her  claim  to  commercial  and  metropolitan 
honors  only  by  contention.  Philadelphia,  Baltimore, 
New  Orleans,  and  even  Charleston  represented  in- 
terests as  important  as  those  which  centered  upon 
Manhattan  Island.  Cotton  was  then  an  infant 
monarch  of  little  power,  but  the  plantation  interests 
of  the  South,  which  were  striding  daily  into  promi- 
nence, centered  at  Baltimore  and  Charleston ;  the 
great  highway  of  the  Mississippi  was  already  begin- 


ning to  take  the  products  of  the  West  to  New  Or- 
leans ;  while  Philadelphia,  with  her  great  banking  in- 
terests, and  New  England,  with  her  flourishing  West 
Indian  trade,  were  further  challenging  New  York. 
Of  the  total  commerce  of  the  country,  New  York 
had  only  about  one  fourth  credited  to  her.  Singu- 
larly enough,  it  differed  but  little  in  its  import  fea- 
tures from  that  of  to-day.  The  causes  of  this  are 
not  hard  to  discover.  The  mercantile  interests  of 
the  city  were  already  developed.  Her  social  life 
differed  only  in  degree  from  that  of  the  European 
capitals,  and  wealth  and  luxury  were  found  every- 
where. The  old  aristocratic  flavor  of  the  colonial 
days  still  remained,  and  in  politics  alone  was  found 
the  dominant  democracy  of  the  time.  Gentlemen's 
cellars  still  nursed  in  dusty  bins  the  choicest  wines 
of  sunny  France,  of  Portugal,  and  of  Madeira,  which 
made  the  invoice  of  many  an  arriving  merchantman. 
Olives,  oil,  dried  fruits,  and  hundreds  of  other  luxu- 
ries came  from  the  Mediterranean  ports,  while  coffee, 
sugar,  spices,  indigo,  dyestuffs,  and  other  tropical 
products  arrived  from  the  West  Indies  and  from 
the  Orient.  Cloth  and  manufactured  articles  of 
all  kinds  for  the  use  of  New  York  were  brought 
from  England  and  France,  and  with  the  other 
imports  were  traded  for  the  wheat,  flour,  corn, 
beef,  fish,  provisions,  furs,  lumber,  and  tobacco  which 
our  own  country  sent  here  for  a  market.  Very  little 
money,  generally  speaking,  changed  hands.  Com- 
merce resembled  more  an  extended  application  of 
the  barter  system  of  the  early  trading-post  than  an 
international  business  relation. 

To  this  brief  rdsume"  of  the  situation  as  it  pre- 
sented itself  to  the  bewigged  old  gentlemen  who 
gathered  daily  at  the  so-called  Merchants'  Exchange 
in  the  Tontine  Coffee-House  during  the  early  days 
of  the  year  1795,  only  one  thing  remains  to  be 
added.  This  was  the  extreme  insecurity  of  our 
commercial  relations,  which  dashed  the  otherwise 
legitimate  undertakings  of  our  merchants  with  a 


55 


56 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


speculative  savor  found  to-day  only  in  the  stock 
market.  England  in  1783  was  unable  longer  to 
withhold  political  liberty,  but  a  dozen  years  later 
she  still  endeavored  to  hold  on  to  many  of  the  ma- 
terial advantages  of  colonial  days. 

The  first  step  toward  removing  the  obstructions 
which  embarrassed  our  commerce  was  the  Jay 
treaty.  The  successful  negotiation  of  this  first  of 
our  commercial  treaties,  imperfect  though  it  was, 
well  deserves  centennial  celebration.  It  marks  our 
admission  as  a  nation  into  the  world's  fraternity  of 
commerce. 

Many  a  famous  fortune  of  to-day,  and  many  a 
great  business  house  since  known  all  over  the  civ- 
ilized world,  were  founded  in  the  next  decade.  At 
this  time  New  York  was  scarcely  half  as  large  as 
Philadelphia.  Its  merchants,  who  to-day  would  be 
called  importers,  and  its  retail  storekeepers,  trans- 
acted the  business  of  the  town.  There  were  no 
manufacturing  interests,  and  even  in  1800  this 
branch  of  industry  had  only  reached  an  annual  out- 
put of  about  $250,000,  a  large  part  of  which  was 
accredited  to  brewing  and  distilling.  When  it  is 
considered  that  to-day  New  York's  factories  turn  out 
annually  over  $600,000,000  worth  of  goods,  the  sig- 
nificance of  the  change  from  the  condition  in  which 
they  started  will  be  better  appreciated. 

The  city  of  New  York  during  this  period  extended 
only  about  to  Reade  Street  or  Duane  Street,  and 
above  Canal  Street  was  still  the  open  country.  The 
docks  were  in  the  southeastern  part  of  the  island, 
beginning  at  Whitehall  Street  and  running  around 
to  Peck  Slip.  Above  these,  all  along  the  shore, 
were  the  shipyards,  which  were  the  first  to  feel  the 
impetus  of  the  good  times  that  were  inaugurated  in 
1795.  Those  were  the  days  when  a  few  hundred 
dollars  built  a  stanch  little  vessel.  Her  hull  was 
easily  mortgaged  for  so  much  as  would  supply  her 
with  sails  and  rigging,  and  the  profits  of  her  first 
voyage  to  the  West  Indies  were  such  that  she  would 
tie  up  to  the  home  dock  completely  paid  for. 
Through  the  activity  of  trade  the  ship-builder  and 
the  merchant  prince  reached  a  prominence  never 
before  gained  by  any  class  in  the  community.  With 
the  exception  of  the  farmers,  they  were  almost  the 
only  employers  of  labor.  It  was  an  age  which,  with 
all  its  simplicity,  affected  a  lavishness  of  living  ex- 
penditure, and  these  nabobs  spent  their  money  as 
freely  as  they  made  it.  Their  argosies  came  back 
to  them  laden  with  all  the  latest  products  of  Euro- 
pean industry  and  skill.  Their  warehouses,  filled 
to  overflowing,  poured  into  the  empty  holds  of  these 
vessels  great  cargoes  of  grain,  breadstuffs,  fish,  and 


provisions,  which  were  carried  to  Europe,  laid  waste 
by  Napoleon  and  his  French  legions,  and  which 
brought  fabulous  prices.  Return  cargoes,  sold  at 
enormous  profit  here,  still  further  added  to  the  lu- 
crative nature  of  this  early  trade,  and  the  merchants 
of  New  York  improved  their  time  to  accumulate 
wealth  without  interruption  until  the  Embargo  of 
President  Jefferson  in  1807. 

In  the  mean  time,  however,  many  things  were 
happening  which  were  later  to  produce  their  effect 
upon  the  trade  of  New  York.  These  causes  had 
already  begun  to  shape  themselves  in  1800.  The 
population  of  the  city  was  then  60,489,  and  it  was 
distinctly  commercial  and  maritime  in  its  nature. 
The  offices  of  the  largest  merchants,  the  three  banks, 
the  three  insurance  companies,  and  all  the  business 
energy  of  the  city  had  centered  about  Wall  Street, 
excepting  the  shops  and  smaller  retail  establishments, 
which  lined  Pearl  Street,  making  it  a  main  thorough- 
fare then  and  for  thirty-five  years  thereafter.  The 
coastwise  and  inland  trade  had  brought  to  the  docks 
sloops  and  quaint  old  craft  in  shoals  from  New  Jer- 
sey, up  the  Hudson,  and  along  the  Sound,  which 
brought  firewood,  brick,  farm  produce,  and  other 
articles,  and  took  away  general  supplies.  Further 
than  this,  a  large  fishing-fleet  made  this  port  its 
headquarters,  and  its  season's  catch,  dried  and 
salted,  continued  for  many  years  to  be  an  important 
part  of  our  exports. 

Of  manufactured  articles,  except  the  very  coarsest 
grades,  we  produced  almost  none  at  that  time ;  but 
under  the  fostering  of  the  Embargo  and  the  war 
blockade  there  came  a  great  manufacturing  move- 
ment, which  continued  for  a  period  of  three  years. 
In  1 800  attempts  were  made  for  industrial  indepen- 
dence in  many  branches.  The  iron-working  indus- 
try, always  prohibited  by  England  to  the  colonies, 
was  begun  in  a  minor  way  in  New  York  by  such 
men  as  Robert  McQueen,  James  P.  Allaire,  and 
others.  Pianos,  soon  to  become  an  essential  in  the 
drawing-rooms  of  all  cultivated  people,  were  among 
the  earliest  of  American  manufactures.  Dodds  & 
Claus,  the  first  firm  engaged  in  this  business,  were 
making  them  as  early  as  1792  at  66  Queen  Street, 
now  a  part  of  Pearl.  Besides  this  most  important 
branch,  New  York's  other  industries  were  two  or 
three  hat  factories,  which  employed  a  few  hands  at 
cheap  wages,  and  several  breweries,  distilleries,  and 
tanneries.  The  trade  in  furs,  too,  was  extensive  at 
this  time,  and  John  Jacob  Astor  soon  after  organ- 
ized a  single  company,  with  a  capital,  enormous  for 
those  days,  of  $1,000,000,  the  greater  part  of  which 
was  furnished  by  him.  He  further  increased  his 


HORACE  PORTER. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


67 


operations  a  few  years  later  by  absorbing  two  other 
companies,  and  establishing  a  Western  depot  on  the 
Columbia  River.  With  the  exception  of  this  latter 
enterprise,  which  soon  failed,  his  business  was  in 
New  York. 

Europe  during  all  this  period  was  torn  by  the 
struggles  of  those  national  giants,  France  and  Eng- 
land. Each  of  the  combatants  had  proclaimed  a 
blockade  against  all  European  ports  except  those 
under  its  own  control,  and  any  merchantman  flying 
the  United  States  flag  was  liable  to  confiscation,  if 
caught  by  a  patroling  cruiser  or  privateer  of  either 
nation  near  the  blockaded  coast.  Many  ships  were 
lost  in  this  way ;  but  the  enormous  profits  gained 
when  a  vessel  managed  to  slip  a  cargo  through  were 
so  tempting  that  New  York  merchants  continued  to 
embark  in  such  ventures.  It  was  at  this  time  that, 
protest  having  proved  unavailing,  President  Jefferson 
believed  himself  to  have  found  a  way  to  force  the 
belligerent  powers  to  respect  the  neutrality  rights  of 
America.  To  this  end  he  issued  in  1807  his  Em- 
bargo, prohibiting  all  American  merchantmen  from 
leaving  port,  and  forbidding  the  shipment  of  Ameri- 
can cargoes  in  foreign  bottoms.  It  was  his  belief 
that  Europe's  need  of  the  provisions  this  country 
supplied  would  drive  her  to  conciliation.  In  this 
idea  he  proved  mistaken,  and  the  Embargo  was 
necessarily  repealed  in  1809.  It  had,  however, 
accomplished  great  mischief  to  New  York's  com- 
merce, as  well  as  to  that  of  the  country  at  large. 
The  great  fleets  of  the  merchant  princes  lay  rotting 
at  their  anchorages.  The  warehouses  were  deserted, 
and  grass  grew  upon  the  unused  docks.  Many 
clerks  were  discharged,  and  their  poverty,  together 
with  that  of  hundreds  of  sailors  thrown  out  of  em- 
ployment, made  the  suffering  among  the  laboring 
class  severely  felt. 

The  most  important  event  of  this  time,  however, 
and  one  that  far  outranks  the  Embargo  in  its  con- 
tinuing importance,  was  the  building  by  Robert 
Fulton  of  the  Clermont,  the  first  steamboat,  though 
it  was  little  more  than  a  toy.  He  was  aided  with 
means  by  Chancellor  Livingston.  At  a  speed  of 
between  four  and  five  miles  an  hour  the  little  vessel 
made  the  trip  to  Albany  and  return,  thus  inaugurat- 
ing the  present  era  of  steam-navigation.  She  was 
speedily  followed  by  others.  Steamboats  were  run- 
ning on  Long  Island  Sound  in  1818,  and  the  fol- 
lowing year  John  C.  Stevens,  of  Hoboken,  built 
the  steamer  Savannah,  of  380  tons,  which  was  the 
first  steam-vessel  to  cross  the  Atlantic.  Ten  years 
later  there  were  fifty  steam-packets  running  into 
New  York  harbor,  and  in  1840  the  first  regular 


transatlantic  steamers  were  started  by  the  Cunard 
Line. 

The  repeal  of  the  Embargo  in  1809  had  scarcely 
time  to  bring  about  any  great  results  before  die  War 
of  1812;  and  an  immediate  blockade  by  a  British 
fleet  of  the  port  of  New  York  again  locked  up  the 
city  within  the  narrowest  limits,  even  her  coastwise 
trade  being  stopped.  Much  distress  resulted  in  the 
winter  from  the  lack  of  firewood  ordinarily  brought 
by  the  Jersey  sloops.  The  blockade,  too,  had  an 
added  severity  over  the  Embargo,  in  the  fact  that, 
being  a  community  dependent  upon  England  for 
goods,  we  were  suddenly  cut  off  from  our  supply, 
and  found  ourselves  without  means  at  home  to  rem- 
edy the  deficiency.  Then  it  was  that  the  attention 
of  New  York  was  for  the  first  time  turned  seriously 
toward  manufacturing.  Homespun,  although  worn 
in  the  country  at  large,  would  scarcely  do  for  the 
fashionable  people  in  New  York ;  and  all  the  hundred 
and  one  conveniences  demanded  by  dwellers  in 
city  and  country  must  be  supplied.  In  response  to 
this  demand  factories  sprang  up  as  if  by  magic. 
Especially  wonderful  was  the  sudden  growth  when 
it  is  considered  that  there  was  not  a  shop  in  the 
country  then  capable  of  turning  out  anything  but 
the  simplest  machinery.  Despite  all  adverse  condi- 
tions, industries  multiplied  and  prospered.  Ameri- 
can wool,  which  had  hitherto  been  supposed  only 
fit  for  the  coarsest  kinds  of  cloth,  was  successfully 
used  for  the  manufacture  of  finer  fabrics.  The  first 
woolen-mills,  owing  their  origin  to  the  pressure  at 
this  epoch,  were  started  in  1809,  and  during  the  war 
turned  out  satinet  which  sold  at  $4  per  yard,  and 
broadcloth  which  brought  from  $10  to  $i  2  per  yard. 
In  this,  as  in  the  majority  of  other  lines,  prices  were 
abnormally  high,  and  the  manufacturers  made  much 
money.  Cotton-mills  were  also  started.  Many  em- 
barked in  the  new  ventures,  and  nearly  every  kind 
of  manufacturing  was  represented.  When  the  war 
ended  prosperity  departed  as  suddenly  as  it  had 
come.  England,  in  her  desire  to  regain  her  former 
market,  poured  in  her  goods  at  prices  far  below 
those  at  which  the  New  York  manufacturer  could 
afford  to  sell  his  products,  and  forced  him  to  shut 
his  doors.  Tens  of  thousands  of  dollars  of  lost  capi- 
tal, and  hundreds  of  operatives  out  of  work,  made 
up  the  result  of  New  York's  first  effort  to  enter  the 
ranks  of  the  world's  producers.  It  was  not  alto- 
gether a  dead  loss,  though,  for  a  spirit  had  been 
roused  which  continually  manifested  itself  during 
the  next  twenty  years,  and  which  eventually  placed 
this  city  high  in  the  list  of  manufacturing  centers. 

With  the  return  of  peace,  Messrs.  Adams,  Galla- 


58 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


tin,  and  Clay  went  to  England,  where  on  July  3, 
1815,  a  commercial  convention  was  negotiated, 
copied  substantially  from  Jay's  treaty,  but  with  an 
added  proviso  for  absolute  reciprocity  in  direct  trade 
by  the  abolition  on  both  sides  of  all  discrimination. 
This  convention  was  ratified  December  2 ad.  Con- 
fidence was  seriously  checked  by  the  financial  and 
industrial  depression  which  followed  the  war,  but 
New  York  was  among  the  earliest  cities  to  rally  and 
continue  her  enterprises.  By  far  the  most  impor- 
tant of  these  was  the  proposed  Erie  Canal.  It  con- 
templated the  connection  of  the  Hudson  River  and 
the  Great  Lakes,  thereby  bringing  to  New  York  the 
wealth  of  products  of  the  great  inland  basin  thus 
reached.  Ground  was  broken  in  the  work  of  dig- 
ging the  great  canal  by  James  Richardson,  on  July 
3,  1817,  near  Rome,  N.  Y.  Eight  years  were  re- 
quired for  the  completion  of  the  task.  On  Novem- 
ber 4,  1825,  the  first  fleet  of  canal-boats  came  through 
from  Buffalo  to  New  York  City,  Governor  De  Witt 
Clinton,  who  in  the  face  of  almost  insurmountable 
obstacles  had  carried  the  work  through,  being  in  the 
first  boat.  The  event  was  celebrated  in  New  York 
with  the  greatest  enthusiasm,  and  marked  the  com- 
mencement of  the  system  of  communication  since 
established  both  by  rail  and  water  with  the  interior 
of  the  country. 

As  Governor  Clinton  and  the  few  far-sighted  men 
who  had  supported  him  in  his  giant  undertaking 
had  foreseen,  the  new  canal  began  at  once  to  revo- 
lutionize the  internal  trade  of  America.  By  it  New 
York  was  able  to  reach,  cheaply  and  quickly,  dis- 
tricts which  had  hitherto  been  accessible  only  by  a 
long  and  circuitous  route  around  Florida,  through 
the  Gulf,  and  up  the  Mississippi  River.  The  Erie 
Canal  afforded  to  New  York  what  she  then  most 
needed — an  opportunity  to  extend  her  domestic  dis- 
tribution and  collection.  It  was  the  first  move  made 
for  the  protection  of  this  city  against  the  prosperous 
factors  of  New  Orleans,  to  whose  doors  the  great 
Mississippi  was  bearing  in  daily  increasing  numbers 
the  huge  flat-bottomed  river-boats  laden  with  the 
products  of  the  West.  Many  States,  like  Ohio,  In- 
diana, and  Illinois,  were  in  the  habit  of  sending  their 
products  to  New  Orleans  for  export,  although  ob- 
taining their  supplies  and  imports  from  New  York. 
The  canal  put  all  these  localities  in  closer  touch 
with  the  great  seaboard  city,  and  paved  the  way  as 
nothing  else  could  have  done  for  railroad  transpor- 
tation facilities,  when  their  turn  came,  a  few  years 
later. 

Meantime  the  commerce  of  New  York  continued 
to  flourish.  Packet  lines  with  regular  weekly  sail- 


ings were  established,  the  first  being  the  Blackball 
Line,  founded  in  1816  by  Isaac  Wright  &  Son,  Fran- 
cis Thompson,  Benjamin  Marshall,  and  Jeremiah 
Thompson.  It  was  followed  by  the  Red  Star  Line, 
organized  by  Trimble  &  Company,  in  1821  ;  the 
Havre  packets  of  Depau,  in  1822;  Grinnell,  Min- 
turn  &  Company's  London  Line,  in  1823 ;  and  the 
China  and  California  packets  of  Low,  Griswold  & 
Aspinwall,  still  later.  The  first  of  these  lines,  with 
its  regular  sailing-days,  began  the  systematizing  of 
transatlantic  trade ;  and  the  imports  to  New  York 
during  the  ten  years  following  1820  increased  nearly 
$8,000,000,  while  the  export  trade  made  a  corre- 
sponding gain,  the  total  imports  and  exports  of  the 
country  in  1830  amounting  to  $144,776,428.  Two 
years  later  the  $10,000,000  which  New  York  had 
put  into  the  great  ditch  of  the  Erie  Canal  was  show- 
ing its  fullest  results.  With  a  registered  and  enrolled 
tonnage  of  286,438, — greater  than  Liverpool  or 
any  city  in  the  world  except  London, — the  harbor  of 
New  York  was  daily  thronged  with  vessels.  Either 
discharging  at  the  docks — which  had  by  this  time 
stretched  themselves  around  to  the  North  River 
front — or  at  anchor  in  the  stream,  over  500  vessels 
could  be  counted  any  day  in  the  year.  From  for- 
eign ports  nearly  2000  vessels  arrived  annually,  while 
twice  and  a  half  that  number,  engaged  in  the  coast- 
wise trade,  ran  in  and  out  in  the  same  time.  From 
the  invoices  of  all  these  craft  could  be  read  the  story 
of  a  volume  of  trade  of  dimensions  hitherto  unprec- 
edented. The  amount  New  York  paid  as  valuation 
of  her  imports  in  1832  was  $53,214,402,  while  the 
total  for  the  rest  of  the  country  reached  only  $47,- 
815,864.  By  these  figures  it  will  be  seen  that  New 
York's  percentage  in  duties  would  easily  make  her 
the  chief  contributor  to  the  revenues  of  the  govern- 
ment, as  she  was  and  always  has  been.  Of  the  im- 
ports of  that  time,  manufactured  articles,  fully  fifty 
per  cent,  of  which  were  dry-goods,  made  the  great 
bulk.  Besides  the  silks,  woolens,  cotton  goods,  and 
linen,  hardware,  cutlery,  earthenware,  and  workings 
of  brass  and  copper,  together  with  the  wines  and 
spirits  which  England  and  France  supplied,  there 
was  a  large  and  flourishing  trade  with  Brazil  and 
the  West  Indies  in  sugar,  molasses,  and  coffee,  and 
with  the  Orient  in  tea,  spices,  indigo,  dyestuffs,  and 
other  tropical  products. 

The  exports  from  New  York  during  this  same 
year  reached  the  amount  of  $26,000,945,  or  between 
one  fourth  and  one  third  of  the  total  exports  of  the 
country.  The  prominence  of  New  Orleans  as  a 
port  of  the  West  explains  the  discrepancy  between 
in  and  out  volume  of  trade  of  New  York,  which  dis- 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


crepancy,  in  fact,  existed  more  or  less  markedly  up 
to  the  time  of  the  railroads.  The  exports  most  im- 
portant at  that  time  were  wheat,  flour,  corn,  rice, 
beef,  pork,  butter,  dried  fish,  general  provisions,  furs, 
tobacco,  and  lumber,  together  with  some  of  the 
coarser  grades  of  manufactured  goods.  In  this  list 
the  manufacturing  progress  of  the  city  since  the  dis- 
astrous setback  that  followed  the  War  of  1812  is 
plainly  shown.  Soap,  boots  and  shoes,  furniture, 
carriages,  trunks  and  leatherwork,  hats,  cordage, 
earthen  and  stone  ware,  drugs,  and  rough  ironwork 
were  all  being  turned  out,  and  in  quantity  sufficient 
to  warrant  exportation  in  many  of  the  lines  enumer- 
ated. There  were  also  paper-mills,  type-foundries, 
printing-press  manufacturers,  and  large  flouring  and 
tanning  interests  centered  here. 

The  prosperity  of  this  time,  commercial  and  finan- 
cial, was  rudely  broken  in  upon  three  years  later  by 
the  great  fire  which  occurred  on  the  night  of  Decem- 
ber 16,  1835,  m  Merchant  Street,  and  which,  after 
raging  three  days,  was  finally  extinguished  only  by 
blowing  up  a  number  of  houses  with  gunpowder, 
thus  leaving  a  vacant  space  that  the  flames  could 
not  pass.  It  had  destroyed,  however,  nearly  the 
whole  of  the  business  section.  In  and  around  Han- 
over Square,  Pearl  and  Wall  streets,  648  houses  and 
stores  were  burned,  together  with  contents  valued 
at  $18,000,000.  The  blow  was  a  terrible  one,  and 
the  insurance  companies  of  the  city  succumbed  at 
once.  Scarcely  one  survived.  Business  of  every  sort 
had  been  affected,  and  in  the  severe  winter  weather 
that  prevailed,  building  had  to  be  delayed  and  many 
interests  found  themselves  homeless.  To  the  de- 
pression of  this  great  conflagration  can  be  traced 
many  of  the  active  causes  of  the  financial  panic 
which  broke  over  the  city  and  country  in  1837,  and 
for  a  time  darkened  the  whole  commercial  horizon. 

As  in  the  past,  however,  New  York  was  one  of  the 
first  to  feel  better  times.  The  country  was  growing 
fast  and  demanded  hundreds  of  articles  for  which 
New  York  was  the  distributing  point.  Ohio,  Indi- 
ana, and  Illinois  had  undertaken  canals  connecting 
the  Ohio  and  Mississippi  rivers  with  the  Great  Lakes 
at  Cleveland,  Toledo,  and  Chicago ;  but  with  all  these 
increased  activities  elsewhere  New  York  had  main- 
tained its  position  as  the  great  port  of  entry.  Bal- 
timore's attempt  to  accomplish  a  connection  with 
the  West  by  the  Baltimore  and  Ohio  Railroad  in 
1828  did  not  prove  immediately  valuable  when  com- 
pleted, and  Philadelphia,  with  the  otheri  seaboard 
cities,  still  found  the  lofty  walls  of  the  Alleghanies 
an  insurmountable  obstacle.  Railroads  were  in  op- 
eration, but  only  in  unconnected  lengths,  and  trunk- 


lines  were  still  in  the  future.  The  telegraph,  des- 
tined in  its  later  applications  to  revolutionize  the 
commercial  methods  of  the  world,  was  discovered 
by  Professor  Morse  in  New  York,  and  a  line— the 
first— was  built  between  this  city  and  Philadelphia 
in  1845.  A  setback  caused  by  another  great  fire 
in  this  same  year  (1845),  which  destroyed  nearly 
$8,000,000  of  property,  was  speedily  passed  over. 
The  railroads  were  surely,  if  slowly,  increasing  and 
improving.  The  trade  in  the  China  seas  and  with 
India  was  extending,  and  despite  its  great  risks 
many  houses  were  growing  rich  and  powerful  in  its 
pursuit.  Manufacturing  had  increased  to  a  point 
where  the  permanency  of  its  institution  could  no 
longer  be  doubted.  The  boundless  resources  of  the 
great  Western  granaries  were  pouring  in  yellow 
streams  to  Europe.  The  Collins  Line  of  steamers, 
with  five  magnificent  ships  subsidized  by  the  United 
States  government,  were  put  upon  the  Atlantic 
Ocean ;  but  the  loss  of  the  Pacific  and  Arctic,  fol- 
lowed by  the  withdrawal  of  the  subsidy,  ended  the 
operations  of  the  line  in  1858. 

The  event  of  this  period,  so  far  as  New  York's 
commercial  greatness  is  concerned,  however,  was 
the  opening  of  the  first  trunk-line,  the  Erie,  to  Dun- 
kirk, in  1851.  It  demonstrated  the  usefulness  of  the 
railroad,  doubted  even  at  that  day  by  many,  and 
was  speedily  followed  by  other  great  systems  stretch- 
ing out  in  all  directions.  Long  before  this  first  road 
was  finished  New  York's  position  as  the  metropolis 
of  the  United  States  was  assured ;  but  its  connection 
with  railroads  of  sufficient  length  was  as  important 
to  it  as  the  opening  of  the  Erie  Canal  had  been 
twenty-five  years  before.  The  commercial  interests, 
which  had  originated,  developed,  and  supported  the 
city's  greatness,  began  still  further  to  expand.  The 
financial  troubles  of  1857  found  New  York  the  least 
susceptible  to  their  attack.  It  speedily  recovered, 
and  the  next  year  saw  the  commerce  of  the  country 
reach  a  total  valuation  of  over  $500,000,000,  of 
which  only  about  two  fifths  was  accredited  to  New 
York,  despite  the  fact  that  nearly  two  thirds  of  the 
imports,  amounting  to  $180,953,843,  had  passed 
through  her  custom-house.  The  preeminence  of 
New  Orleans  in  the  cotton  export  trade  still  con- 
tinued to  keep  that  city  on  terms  of  formidable  riv- 
alry with  New  York,  while  Galveston,  also  deriving 
its  importance  from  the  same  staple,  was  coming  to 
the  front  with  Baltimore,  Savannah,  and  Charleston. 

This  year  of  1858  was  destined  to  see  one  of  the 
most  marvelous  of  the  century's  achievements— the 
laying  of  the  first  transatlantic  cable,  which  was  ac- 
complished through  the  enterprise  of  several  of  New 


60 


ONE   HUNDRED  YEARS  OF  AMERICAN  COMMERCE 


York's  public-spirited  citizens.  Though  it  operated 
successfully  for  only  a  few  days,  its  practicability 
was  demonstrated,  and  1865  and  1866  saw  others 
laid  and  the  present  great  oceanic  system  of  tele- 
graphs begun. 

The  brief  operation  of  the  cable  of  1858  furnished 
one  striking  incident  of  the  utmost  commercial  im- 
portance. Over  it  was  announced  the  collision  be- 
tween the  steamers  Europa  and  Arabia,  the  recep- 
tion of  this  news  saving  the  business  world  at  least 
$250,000,  which  would  otherwise  have  been  spent 
in  additional  insurances  on  the  vessels  and  their 
cargoes. 

In  1859  the  country  at  large  owned  a  total  ton- 
nage of  3,485,266, — greater  than  that  of  any  or  all 
nations  on  earth  except  the  United  Kingdom,— while 
New  York  herself  alone  had  a  tonnage  greater  than 
any  of  the  other  countries,  with  the  exception  of 
Great  Britain.  This  great  fleet,  carrying  the  chief 
part  of  all  America's  commerce  under  her  own  flag, 
was  also  strong  in  her  competition  for  the  carrying 
trade  of  the  world,  the  lion's  share  of  which  she  had 
already  won.  In  the  coastwise  trade  an  enrolled 
and  licensed  tonnage  of  1,377,424  plied  to  and  from 
New  York  harbor. 

The  period  comprised  by  the  next  few  years  is 
one  which  lends  itself  to  be  told  by  figures  more 
readily  than  in  any  other  way.  The  growing  net- 
work of  the  railroads  had  been  slowly  diverting  the 
cotton  from  the  smaller  seaports  in  its  movement  to 
the  markets,  and  New  York  was  now  getting  a  fair 
share.  Her  total  imports  for  the  year  1861,  preced- 
ing the  Civil  War,  amounted  to  $188,790,086,  out 
of  $287,250,542  credited  to  the  country  as  a  whole. 
Of  the  exports,  of  the  value  of  $204,899,606,  New 
York  had  more  than  doubled  the  figures  of  three 
years  earlier,  and  claimed  $118,267,177.  The  ton- 
nage of  the  country  had  swelled  to  the  vast  total 
of  5,299,175,  and  merchantmen  carrying  the  Stars 
and  Stripes  and  hailing  from  New  York  could  be 
seen  in  every  port  of  the  civilized  world.  It  was 
the  golden  age  of  American  shipping ;  and  although 
New  York  is  a  far  greater  city  to-day  than  she  was 
then,  it  is  still  a  matter  of  regret  that  she  cannot 
carry  on  her  vast  transactions  with  an  American 
marine,  rather  than  beneath  the  flags  of  other  coun- 
tries whose  vessels  traverse  the  seas.  The  golden 
age  was  brief,  however.  It  grew  up  in  the  years  be- 
tween 1820  and  1860,  and  it  was  cut  down  almost 
in  a  year— one  year  of  war.  The  close  of  1862 
found  the  United  States'  merchant  fleet  smaller  by 
many  thousands  of  tons  than  it  had  been  the  pre- 
ceding year,  while  Great  Britain,  ever  on  the  watch 


to  secure  an  advantage,  had  increased  her  fleet  cor- 
respondingly and  was  rapidly  becoming  the  carrier 
of  the  world's  freights. 

The  imports  at  New  York  showed  still  further  the 
effects  of  the  war.  A  falling  off  of  over  $50,000,000 
was  the  record,  but  even  this  was  far  better  than 
that  which  happened  to  the  remainder  of  the  coun- 
try, which  added  up  its  total  import  trade  to  only 
$189,356,677.  The  export  trade  of  the  country  at 
large  was  affected  least  by  the  troubles  of  this  time 
and  only  decreased  slightly,  while  New  York's  ex- 
ports actually  increased,  amounting  to  $127,65 1,778, 
or  about  $9,000,000  more  than  during  the  preced- 
ing year.  The  cause  of  this  was  shown  later  in  the 
year  following  the  war,  when  between  the  exports  of 
New  York  for  1864  and  those  for  1866  there  was  a 
falling  off  in  the  latter  year  of  nearly  $33,000,000, 
due  mainly  to  the  resumption  of  the  Southern  ports. 

The  effect  of  the  Civil  War  upon  New  York's 
commerce  fortunately  lasted  only  a  short  time. 
Had  it  not  been  for  the  disturbance  it  caused  to 
general  business  it  is  doubtful  whether  the  war,  in 
its  effect  commercially,  would  not  have  been  con- 
sidered to  a  high  degree  beneficial.  The  figures, 
when  studied,  show  this  to  have  been  so  relatively, 
at  least.  New  York  was  undoubtedly  more  promi- 
nent and  a  larger  factor  in  the  trade  of  the  country 
between  1861  and  1864  than  she  is  now,  but  it  was 
a  much  smaller  trade.  Her  own  particular  pros- 
perity increased  with  the  end  of  the  war,  and  in 
1870  her  imports  and  exports  had  increased  to  over 
$100,000,000  greater  than  they  were  in  1862,  while 
the  total  trade  of  the  United  States  aggregated  nearly 
$900,000,000. 

The  foregoing  figures  show  that  the  commerce  of 
New  York  recovered  very  quickly  from  the  shock  of 
war.  The  shipping  interests  of  the  city  were  not  so 
fortunate.  Out  of  a  total  lost  tonnage  of  1,104,435 
due  to  the  war,  New  York  had  suffered  about  one 
fifth  of  the  whole.  This  loss  has  been  recovered 
but  slowly,  and  even  to-day  the  figures  have  not  re- 
turned to  the  point  from  which  they  fell.  Instead 
of  two  thirds  of  the  commerce  of  the  port  being 
done  in  American  bottoms,  as  it  was  prior  to  1860, 
there  is  scarcely  a  quarter  of  it  that  does  not  go  to 
foreign  carriers.  England  has  nearly  8,000,000  of 
tonnage  more  to-day  than  we,  and  much  of  New 
York's  trade  is  carried  on  under  her  flag.  Ship-build- 
ing has  accordingly  ceased  to  be  a  great  New  York 
industry,  which  it  was  earlier  in  the  century. 

Since  the  war  all  attempt  to  particularize  in  sketch- 
ing the  history  of  such  a  gigantic  emporium  as  New 
York  is  hopeless.  The  causes  which  have  already 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


been  laid  down  as  operating  to  bring  about  her 
greatness  are  equally  strong  to  maintain  it.  The 
natural  center  of  the  enormous  wealth  of  the  East- 
em  seaboard  States,  she  is  also  in  direct  contact  by 
her  railroads  and  waterways  with  the  most  remote 
centers  of  production,  and  to  her  as  the  only  real 
distributer  must  the  imports  come.  Despite  the 
fact  that  storage  and  wharfage  charges  are  higher 
than  in  almost  any  other  port,  one  third  of  the  entire 
wheat  crop  of  the  country  is  exported  from  this  city. 
The  war  and  the  railway  systems  together  have  so 
militated  against  the  Southern  cotton  ports  that  a 
large  share  of  that  trade  passes  through  New  York. 
Petroleum  and  the  valuable  products  of  the  won- 
derful oil  regions,  dressed  beef  and  pork  from  the 
enormous  packing-houses  of  Chicago  and  other 
Western  cities,  live  cattle  from  Texas  and  the 
Western  plains,  and  breadstuffs  and  provisions  of 
all  kinds,  make  up  much  of  the  great  volume  of 
exports.  Of  the  staples  of  import,  among  the  most 
important  are  sugar,  coffee,  tea,  and  tobacco.  Of 
these,  one  half  the  sugar  and  three  fourths  each  of 
the  coffee  and  tea  imported  for  the  whole  country 
pay  duty  at  this  port. 

To  show  more  clearly  the  magnitude  of  the  busi- 
ness transactions  involved  in  the  commercial  state- 
ments of  to-day,  a  few  figures  taken  from  the  best 
available  sources  will  be  useful.  The  year  1885 
gave  a  total  volume  of  commerce  for  the  United 
States  of  $1,304,210,275.  New  York's  returns  for 
the  same  period  showed  imports  amounting  to  $380,- 
077,748  and  exports  $334,718,227,  making  a  total 
of  $714,795,975-  In  1893,  in  the  face  of  the  finan- 
cial and  commercial  troubles  of  the  year,  the  coun- 
try's total  foreign  trade  showed  an  increase  of  nearly 
$350,000,000,  making  a  total  of  $1,652,354,534. 
New  York's  share  in  the  nation's  increased  trade 
was  about  $170,000,000,  her  total  figures  for  the 
year  being  $886,487,641. 

To  meet  the  demands  of  the  enormous  traffic  in- 
dicated by  these  figures,  New  York  has  expanded 
in  every  way.  It  now  has  a  population  of  about 
2,000,000,  and  manufacturing  interests  with  an  an- 
nual productivity  of  $600,000,000  and  employing 
500,000  hands.  It  is  a  center  for  the  greatest 
railways  of  the  country,  and  a  sailing  port  for  half 
a  hundred  great  ocean  steamship  lines.  It  has  a 
water-front  of  twenty-five  miles,  thirteen  of  them 
being  along  the  North  River,  and  the  dock  facilities 
are  increasing  every  day.  The  recently  completed 
Harlem  Canal  between  the  Harlem  and  Hudson 
rivers  has  been  put  into  operation,  and  with  its  facil- 
ities the  great  coastwise  trade  in  bricks,  ice,  and 


lumber  between  New  England  and  the  Sound  ports 
and  the  Hudson  River  towns  has  been  materially 
increased,  and  a  saving  of  many  miles  accomplished 
for  a  number  of  vessels  coming  in  on  one  side  of 
Manhattan  Island  and  having  to  discharge  on  the 
other  side. 

The  harbor  of  New  York  to-day  is  thronged  with 
vessels  the  year  round.  Lofty-masted  sailing  fleets 
are  docked  along  South  Street ;  coastwise  vessels 
and  freight  and  passenger  transatlantic  steamships 
stretch  for  miles  along  West  Street,  interspersed  with 
slips  for  market-boats  and  fishing  craft ;  while  count- 
less ferries  furnish  a  connection  with  neighboring 
cities.  5,000,000  annual  tonnage  is  computed  to  be 
the  extent  of  the  city's  shipping  traffic,  and  928,000 
of  this  is  in  the  foreign  trade,  the  coastwise  trade 
with  its  colliers,  and  the  fleet  of  New  England  schoon- 
ers, making  a  large  percentage  of  the  remainder. 
A  total  of  about  6000  vessels,  steam  and  sail, 
arrive  here  annually  from  foreign  ports,  while  nearly 
16,000  enter  in  the  coastwise  trade,  of  which  fully 
14,000  are  sailing  craft.  In  addition  to  the  Euro- 
pean lines  there  are  regular  steamships  to  Brazil, 
Venezuela,  the  Central  American  and  Mexican  ports, 
and  the  West  Indian  Islands. 

The  precautions  taken  to  guard  the  city  from 
contagion  from  any  of  the  increasing  number  of 
merchantmen  have  resulted  in  the  establishment  of 
an  effective  quarantine.  Originally  instituted  in 
1746  on  Staten  Island,  moved  to  Bedloe's  Island 
in  1784  by  the  State  legislature,  and  to  Governor's 
Island  in  1794,  it  returned  finally  to  Staten  Island 
in  1 80 1,  where  its  usefulness  has  steadily  increased. 
The  immigration  in  this  country  centers  almost  en- 
tirely in  New  York,  over  four  fifths  of  the  total  tide 
coming  to  Ellis  Island. 

The  mercantile  interests  of  the  city  have  likewise 
increased  with  the  general  expansion,  until  to-day 
there  is  scarcely  a  great  interest  in  the  country  which 
has  not  agents  in  New  York.  Foreign  houses  also 
have  established  branches  here,  and  the  old  mer- 
chant of  one  hundred  years  ago  has  become  the 
great  importer  of  to-day,  while  his  jealously  guarded 
designation  of  "merchant"  has  fallen  upon  the 
modem  business  man,  jobber,  wholesale  dealer,  and 
manufacturing  agent. 

Diversified  as  the  commercial  lines  have  become, 
the  growth  to  separate  importance  of  the  various 
branches  with  their  ramifications  has  compelled  the 
introduction  of  new  methods.  The  Chamber  of 
Commerce  and  the  Board  of  Trade  and  Transpor- 
tation constitute  bodies  as  great  and  productive  of 
good  as  ever,  but  around  them  have  grown  up  many 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


subdivisions  of  the  various  interests.  A  single  trade 
to-day  transacts  a  greater  business  than  the  com- 
bined interests  of  the  whole  city  did  one  hundred  years 
ago,  and  some  facilitation  of  this  enormous  business 
became  necessary.  This  has  resulted  in  the  estab- 
lishment of  many  exchanges,  such  as  the  Produce, 
Cotton,  Coffee,  Coal,  Metal,  Consolidated,  Fruit, 
Real  Estate,  and  others,  all  of  which  concentrate 
the  interests  they  represent  at  some  commercial 
point.  The  shipping  interests  are  represented  at  the 
Maritime  Exchange,  and  the  facilities  of  the  cus- 
tom-house, public  stores,  and  bonded  warehouses  are 
such  as  have  been  found  to  be  of  the  greatest  prac- 
tical benefit.  There  are  1700  employees  in  the  cus- 
toms service  in  New  York;  and  $150,000,000,  col- 
lected at  the  modest  cost  of  about  two  per  cent.,  is 
the  annual  revenue  this  port  contributes  to  the  Fed- 
eral government. 


Summing  up  the  whole  situation,  New  York  to- 
day as  a  commercial  metropolis  outranks  any  city 
in  the  world,  with  the  single  exception  of  London ; 
and  it  requires  no  especially  boastful  spirit  to  say 
that  her  prosperity  is  founded  upon  a  securer  basis 
than  that  of  even  the  great  English  capital.  Stand- 
ing at  the  national  gateway  to  the  great  West,  the 
wealth  that  pours  each  way  must  pass  through  her 
portals.  Combining  the  enterprise  that  attempts 
with  the  wealth  that  makes  of  the  attempt  a  sus- 
tained effort,  she  has  only  begun  her  career  of  great- 
ness. She  has  won  success  in  the  first  and  hardest 
stage  of  her  journey,  and  the  way  is  now  clear  be- 
fore her.  Her  future  is  secure,  for  as  surely  as  the 
nation  shall  wax  greater,  richer,  and  more  powerful, 
so  surely  shall  the  metropolis  of  New  York  continue 
her  onward  progress. 


CHAPTER  XI 


OUR  FOREIGN  TRADE  FROM  A  TRADER'S  STANDPOINT 


DIFFERENT  conditions  of  soil,  climate,  and 
population  exist  throughout  the  world,  so  that 
a  large  portion  of  the  wants  of  one  section  is 
supplied  from  the  products  of  another.  This  inter- 
change is  the  most  important  agency  for  bringing 
the  peoples  of  the  world  into  harmonious  relations. 
By  its  means  the  interests  of  different  regions  have 
become  so  interwoven  that  to-day  no  nation  can  go 
to  war  without  seriously  prejudicing  the  interests  of 
neutral  countries  as  well  as  those  of  many  of  its  own 
citizens.  With  improved  methods  of  production,  and 
the  increased  facilities  for  interchange  of  commodi- 
ties, the  wants  of  mankind  have  rapidly  grown.  The 
luxuries  of  one  generation  have  become  the  necessi- 
ties of  the  next,  so  that  to-day  the  masses  are  living 
under  more  favored  conditions  than  the  nobility  of 
medieval  times,  and  international  trade  has  increased 
fortyfold  since  the  beginning  of  the  eighteenth 
century. 

The  most  important  developments  of  this  "  indus- 
trial age  "  are  the  railroad,  the  steamship,  and  the 
telegraph.  They  have  made  possible  the  transporta- 
tion of  merchandise  of  great  bulk  under  conditions 
generally  beneficial  to  both  producers  and  con- 
sumers. Foreign  trade  has  become  to-day  of  so 
much  importance  that  the  leading  men  of  all  nations 
are  alive  to  the  necessity  of  mastering  the  complex 
conditions  governing  international  commerce,  and 
he  takes  the  highest  place  in  this  age  of  industrial 
wars  who  is  most  prominent  in  creating  conditions 
favorable  to  the  industrial  development  of  the  people 
he  represents. 

In  looking  at  these  rapidly  changing  conditions 
from  a  trader's  standpoint,  one  fact  stands  out,  that 
while  the  volume  of  foreign  trade  has  increased, 
the  margin  of  profit  has  proportionately  decreased. 
The  barter  of  tinsel  trinkets,  firearms,  and  spirits  for 
ivory,  pearls,  and  gold-dust  showed  such  an  enor- 
mous percentage  of  profit  as  to  illustrate  the  igno- 
rance which  existed  under  primitive  means  of  com- 


munication. As  facilities  for  communication  and 
transportation  improved,  rates  of  freight  declined, 
widening  the  circle  of  trade.  During  the  first  three 
quarters  of  this  century  the  margins  of  profit  in 
foreign  commerce  were  so  large  that  merchants  with 
only  moderate  capital  entered  the  field  successfully, 
and  there  grew  up  in  the  maritime  cities  and  towns 
of  this  country  a  well-distributed  business  in  foreign 
trade  and  in  the  building  and  freighting  of  sailing 
vessels  until  we  possessed  the  finest  fleet  of  clipper- 
ships  in  the  world. 

During  the  past  twenty-five  years,  however,  the 
margins  of  profit  in  foreign  trade  and  transportation 
have  been  reduced  at  least  seventy-five  per  cent. 
New  methods  have  been  adopted  in  order  to  suc- 
cessfully meet  these  new  conditions.  Most  of  the 
houses  that  were  leaders  in  our  foreign  trade  one 
quarter  of  a  century  ago  did  not  adapt  themselves 
to  the  changed  environment  of  commerce,  and  were 
forced  out  of  business.  To-day  quick  communica- 
tion and  improved  banking  facilities  enable  the 
foreign  merchant  to  transact  safely  a  much  larger 
business  in  proportion  to  his  capital  than  was  pos- 
sible half  a  century  ago ;  but  these  very  facilities 
have  created  a  competition  so  intense  that  to-day 
there  is  little  or  no  profit  in  transferring  the  great 
staples  from  producer  to  consumer,  so  that  the  trader 
is  forced  into  the  position  of  a  speculator  unless  he 
has  special  facilities  for  distribution.  While  in  for- 
eign trade  the  middleman  is  more  useful  than  in 
domestic  commerce,  the  tendency  of  the  times  is,  by 
bringing  together  producer  and  consumer,  to  elimi- 
nate him.  The  trader  is  forced  to  enlarge  the  field 
of  his  transactions.  This  he  cannot  safely  do  except 
by  the  use  of  expert  abilities  and  scientific  organiza- 
tion. All  this  makes  necessary  large  aggregations 
of  capital ;  and  the  tendency  to  consolidation,  which 
is  the  striking  feature  of  industrial  enterprise,  is  find- 
ing its  way  into  international  commerce. 

Yet  the  trader  has  a  great  advantage  over  the 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


farmer  and  the  manufacturer,  for  his  capital  is  mobile, 
and  not  locked  up  in  land  or  in  machinery  that  in  most 
factories  must  be  thrown  away  within  a  decade  by 
reason  of  new  inventions.  The  Bessemer-steel  rail  and 
the  triple-expansion  engine  have  practically  placed 
the  wheat-fields  of  India,  the  Argentine  Republic, 
and  the  western  United  States  alongside  the  farms  of 
western  Europe.  The  cheap  land  and  cheap  labor  of 
India,  the  natural  advantages  of  the  Argentine,  and 
the  great  machine-reaped  prairies  of  the  West  have 
destroyed  the  profit  of  the  European  tiller  of  the 
soil,  and  practically  extinguished  the  margin  for  the 
landed  proprietor.  The  great  discontent  in  Europe 
to-day  is  largely  due  to  the  unfavorable  condition 
of  the  agrarian  classes;  and  the  demand  made  by 
them  for  something  to  better  their  condition  has 
forced  to  the  surface  the  agitation  of  false  theories 
for  improving  trade  through  silver  legislation. 

The  statistician  Mulhall  has  made  it  possible  to 
know  what  the  trade  of  the  world  has  been,  and  to 
trace  year  by  year  its  enormous  growth.  The  fol- 
lowing table  shows  approximately  the  aggregate 
value  of  imports  and  exports  of  each  country  in 
millions  sterling : 


great  force  of  the  nation  has  been  directed  toward 
the  development  of  our  internal  resources ;  to  inter- 
state commerce  rather  than  to  the  extension  of  for- 
eign trade.  The  largest  commerce  of  the  world, 
conducted  under  the  conditions  of  absolute  free 
trade,  is  carried  on  between  the  States  of  the  United 
States.  Untrammeled  by  customs-duties,  the  people 
of  the  United  States,  covering  a  territory  of  3,000,- 
ooo  square  miles,  have  created  the  most  efficient 
systems  for  exchange  of  commodities.  They  have 
built  185,000  miles  of  railways — as  many  miles  as 
exist  in  all  the  rest  of  the  world.  They  have  created 
the  most  complete  systems  of  navigation  by  lake, 
river,  and  canal,  and  a  banking  system  by  which  a  uni- 
form and  stable  currency  exists  throughout  the  entire 
country.  They  have  not  only  opened  up  mines  and 
extended  agriculture,  but  they  have  developed  man- 
ufacturing; and  while  the  rate  of  wages  has  been 
higher  in  this  than  in  any  other  country,  the  people 
of  the  United  States,  forced  by  necessity  to  meet  the 
low-priced  labor  of  other  countries,  have  applied 
their  high  intelligence  to  the  invention  of  labor- 
saving  machines,  so  that  to-day,  although  the  popu- 
lation of  the  United  States  is  but  70,000,000,  the 


FOREIGN   TRADE   OF   DIFFERENT   COUNTRIES   IN   MILLIONS   STERLING. 


COUNTRIES. 

1720. 

1750. 

1780. 

1800. 

1820. 

1830. 

1840. 

1850. 

1860. 

1870. 

1880. 

1889. 

Great  Britain  

17 

21 

22 

67 

7<1 

88 

1  60 

77C 

CA"? 

698 

France  

7 

13 

66 

107 

Germany  

8 

ie 

2O 

76 

AQ 

4.6 

C2 

167 

Russia  

8 

17 

28 

A.S 

lie 

Austria  

2 

6 

8 

Si 

Italy  .  . 

•? 

c 

7 

3° 

66 

Spain  

IO 

18 

Portugal  

2 

| 

18 

Scandinavia  

2 

7 

t 

5 

8 

§ 

48 

J4 

flA 

Holland  and  Belgium.  .  . 
Switzerland  

4 
I 

6 

2 

8 

15 

24 

1 

3° 

45 

61 

86 

136 

237 
DO 

310 
60 

Turkey,  etc.  .    . 

2 

6 

3" 

45 

29 

55 

49 

72 

Europe  .  . 

62 

228 

Af\R 

CTfi 

United  States  

7 

17 

301 

400 

57° 
62 

T3fi 

!>573 

KI- 

2>I34 

2>3J3 

Spanish  America  

IO 

TC 

A% 

M° 

1D5 

ifir\ 

320 

ififi 

British  colonies  .  . 

2 

35 

7° 

94 

'35 

India  

9 

44 

103 

OK 

T!-»8 

Various  

c 

3° 

So 

85 

131 

Z5 

3° 

35 

5° 

i°5 

149 

The  world  

88 

1  86 

Q,- 

34  1 

407 

573 

532 

,4»9 

2,191 

3'°33 

3>377 

From  this  general  view  of  international  trade  let  us 
turn  to  the  foreign  trade  of  the  United  States.  I  am 
informed  that  Mr.  Worthington  C.  Ford  in  his  con- 
tribution to  this  history  of  American  Commerce, 
will  give  in  detail  the  statistics  of  our  imports  and 
exports.  Although  the  foreign  trade  of  the  United 
States  has  increased  so  that  we  now  do  as  much  in 
one  week  as  we  did  in  one  year  a  century  ago,  the 


labor-saving  machinery  which  is  run  daily  in  this 
country — its  fixed  steam  power  being  one  third  of 
that  of  the  entire  world — has  a  far  greater  produc- 
tive capacity  than  the  population  of  the  Chinese 
empire. 

The  restless  enterprise  of  America,  having  con- 
quered more  than  half  the  continent,  it  is  now  turn- 
ing toward  other  fields  of  activity.  In  the  effort  to 


CHARLES  R.  FLINT. 


ONE   HUNDRED   YEARS  OF   AMERICAN   COMMERCE 


extend  our  commerce  it  is  natural  first  to  consider 
the  countries  south  of  us.  These  countries  can  buy 
of  us  manufactures  and  food  products.  Their  prin- 
cipal employment  is  agriculture,  and  they  form  one 
of  the  most  important  groups  of  those  nations  which 
are  known  to  economists  as  "  neutral  markets." 
There  are  many  evidences  of  the  strength  of  the 
movement  toward  enlarging  our  commercial  rela- 
tions with  these  sister  republics :  the  assembling  of 
the  International  American  Conference,  at  which 
all  the  republics  of  the  Americas  were  represented, 
called  under  an  act  of  our  Congress  for  the  pur- 
pose of  extending  inter-American  trade ;  the  com- 
pletion by  an  American  company  of  telegraphic 
communication  by  land  and  sea  to  the  southern- 
most cities  of  South  America  ;  the  appointment  of  a 
commission,  with  representatives  from  North,  South, 
and  Central  America,  to  report  the  most  desirable 
route  for  an  intercontinental  railway ;  the  establish- 
ment of  the  Bureau  of  American  Republics,  for  the 
purpose  of  publishing  their  statistics  and  other  in- 
formation of  interest  to  those  engaged  in  American 
trade ;  the  simplification  and  unification  of  customs 
regulations ;  a  Monetary  Conference  to  study  plans 
for  facilitating  inter-American  exchange  ;  the  unani- 
mous recommendation  by  all  of  the  American  re- 
publics to  establish  an  International  American  Bank 
under  an  act  of  the  Congress  of  the  United  States, 
with  branches  in  all  the  other  American  republics ; 
the  celebration  of  treaties  of  reciprocity ;  the  pro- 
posed establishment  of  a  permanent  court  to  settle 
all  inter- American  disputes  by  arbitration ;  the  open- 
ing to  our  southern  neighbors  of  this  great  consum- 
ing market  by  continuing  the  free  admission  into 
the  United  States  of  hides,  rubber,  nitrate  of  soda, 
and  other  products,  and  the  recent  removal  of  the 
duties  on  coffee,  sugar,  and  wool,  so  that  to-day  over 
ninety-five  per  cent,  of  the  products  imported  from 
Mexico,  the  West  Indies,  South  and  Central  America, 
amounting  to  $235,000,000,  are  admitted  by  us  free 
of  duty.  Important  as  these  have  been,  of  still  more 
efficiency  is  the  incessant  activity  of  American  mer- 
chants and  manufacturers  who  are  engaged  in  press- 
ing their  wares  upon  the  attention  of  these  most 
excellent  customers. 

The  merchant  engaged  in  foreign  trade  is  obliged 
to  study  not  only  the  conditions  of  the  markets  which 
are  the  distributing  points  of  products,  but  he  must 
also  investigate  the  conditions  of  production.  The 
American  system  of  manufacturing  great  quanti- 
ties of  articles  all  precisely  alike  is  favorable  to  uni- 
form quality  at  the  lowest  cost.  This  cost  is  still 
further  decreased  when  manufacture  is  highly  con- 


centrated. As  a  result  many  great  industries  are 
availing  themselves  of  the  advantages  of  centraliza- 
tion, and  so  securing  economies.  The  first  important 
aggregation  in  capital  and  intelligence  for  the  pur- 
pose of  securing  cheap  production  was  the  Standard 
Oil  Company,  and  they  show  what  may  be  accom- 
plished by  economical  methods  in  building  up  a  great 
foreign  trade.  Without  assistance  from  tariff  pro- 
tection that  great  combination  has  reduced  the  cost 
of  illuminating  oil  to  a  point  where  it  has  been  able 
to  furnish  a  brilliant  but  low-priced  light  even  to  the 
countries  where  the  people  are  the  poorest  and  de- 
mand the  lowest  price,  such  as  China,  Japan,  and 
India.  The  aggregate  of  these  exports  has  reached 
the  enormous  sum  of  $45,000,000  per  annum.  The 
underlying  principles  which  have  created  this  great 
success  are  now  being  applied  to  many  other  in- 
dustries. Through  these  consolidations  the  capacity 
for  cheap  production  is  greatly  increased,  and  such 
concentration  of  capital  and  industry  will  be  a  great 
lever  in  enabling  the  United  States  to  take  possession 
of  foreign  markets  that  heretofore  have  been  domin- 
ated by  competing  nations. 

In  labor-saving  machinery  and  in  intelligence  of 
the  labor  employed,  the  United  States  to-day  is 
in  advance  of  the  rest  of  the  world.  As  an  evi- 
dence of  the  progress  we  are  making  as  a  manu- 
facturing nation  our  exports  of  manufactures  this 
year  will  amount  to  about  $200,000,000  as  against 
$40,000,000  in  1 860.  While  our  merchant  marine 
has  relatively  declined,  the  fleets  of  other  nations 
are  at  our  service.  But  in  one  respect  we  are 
far  behind  the  manufacturing  nations  of  Europe. 
Our  banking  system  was  organized  originally  with 
a  view  to  enable  the  government  to  borrow  great 
sums  of  money  from  the  people  during  the  Civil 
War  by  selling  bonds  to  be  used  as  a  basis  for 
circulation.  It  has  since  been  modified,  and  is 
to-day  a  most  excellent  instrument  of  interstate 
commerce ;  but  it  is  utterly  inadequate  to  deal  with 
foreign  trade.  The  banking  facilities  of  Great 
Britain  devoted  exclusively  to  the  foreign  commerce 
of  that  country  represent  an  investment  of  hundreds 
of  millions  of  pounds  sterling,  while  the  foreign 
merchants  of  the  United  States  are  forced  to  not 
only  be  their  own  traders,  but  their  own  bankers. 
Yet  the  advantages  of  foreign  trade  are  great,  and 
when  the  attention  of  the  financiers  of  the  country 
shall  be  directed  to  the  organization  of  proper  institu- 
tions devoted  to  supplying  this  deficiency,  the  effect 
upon  the  increase  of  American  exports  will  be  marked. 

Such  are  the  conditions  of  the  past  and  of  to- 
day from  the  trader's  standpoint ;  yet  he  may  look 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


toward  the  future  with  equanimity.  While  there  is 
a  tendency  to  eliminate  the  middleman,  neverthe- 
less, if  he  be  one  of  those  fittest  that  are  to  survive, 
he  will  greatly  increase  his  capital.  He  will  perfect 
his  organization  so  that  he  is  ably  represented  in 
every  market  where  he  attempts  to  do  business. 
He  will  freely  use  the  cable  to  put  himself  in  pos- 
session of  all  the  price-making  facts.  He  will 
assist  in  the  formation  of  banking  organizations 
which  will  enable  him  to  finance  his  operations. 
While  the  average  profit  of  transactions  is  steadily 
decreasing,  he  may  so  increase  their  volume  and 
decrease  the  expenses  of  doing  business  that  the  net 
profits  shall  be  as  large  as  or  larger  than  before. 
Then  the  rapid  advance  of  America  into  the  field  of 
international  trade  will  almost  push  him  forward 
into  prosperity,  for  the  skill  and  knowledge  acquired 
through  long  years  of  business  relations  with  foreign 
markets  must  be  availed  of  by  the  manufacturers 
and  producers  who  wish  to  sell  their  goods  abroad. 
By  reason  of  superior  organization  he  is  able  to  per- 
fectly protect  himself  with  reference  to  the  standing 
and  credit  of  his  customers,  and  through  his  large 
capital  he  is  enabled  to  spread  his  transactions  over 
so  many  countries  as  to  greatly  divide  his  risks.  By 
associating  himself  with  the  many  movements  to- 
ward concentration  of  capital  and  consolidation  of 
production  he  will  be  able  more  readily  to  defeat 
his  European  rivals  in  the  markets  of  the  world. 
He  will  do  all  that  he  can  to  forward  such  enter- 
prises as  the  Nicaragua  Canal  and  the  Interconti- 
nental Railroad,  which,  while  in  a  sense  yet  dreams, 
are  dreams  in  course  of  realization.  By  means  of 
these  agencies  certain  disadvantages  of  the  United 
States  in  the  struggle  for  the  world's  trade  will  be 
more  than  counterbalanced,  and  the  trader  will  be 
brought  far  nearer  than  before  to  the  many  regions 
with  which  he  desires  to  do  business. 


During  the  past  ten  years  the  foreign  trader  has 
been  most  seriously  prejudiced  by  the  violent  fluc- 
tuations and  uncertainty  arising  out  of  the  unwise 
attempts  to  create  an  artificial  value  for  silver. 
Through  legislation  the  price  of  silver  was  advanced 
to  $1.20  per  ounce,  but  speedily  reacted  to  less  than 
sixty  cents.  While  these  conditions,  because  under- 
mining confidence,  caused  the  panic  of  1893,  the 
trading  in  this  country,  owing  to  the  government 
sustaining  the  stability  of  its  currency,  had  the  ad- 
vantage of  being  conducted  upon  a  fixed  basis ;  but 
the  trade  of  our  sister  republics  and  of  the  other 
countries  on  a  silver  basis  was  directly  subject  to  the 
rapid  fluctuations  in  the  white  metal.  Importers  were 
obligated  to  remit  in  gold,  and  then,  owing  to  the  de- 
preciation of  the  currency,  had  to  take  fifty  cents  on 
the  dollar.  These  conditions  doubled  the  prices  of 
imports,  thus  curtailing  the  volume  of  importations. 
No  conditions  have  ever  arisen  which  have  so 
obstructed  foreign  trade.  False  hopes  of  relief  were 
based  upon  efforts  to  formulate  an  international 
agreement  fixing  a  uniform  ratio  between  gold  and 
silver.  Fortunately  the  silver  question,  after  several 
campaigns  of  education,  is  better  understood,  and 
this  vexed  problem  is  in  course  of  solution  by  natural 
laws.  Low  prices  are  reducing  the  production  of 
silver,  while  the  output  of  gold  is  rapidly  increasing. 
No  business  has  been  so  seriously  affected  by  the 
uncertainty  and  extreme  fluctuations  in  the  price  of 
silver  as  international  trade,  and  probably  none  will 
benefit  so  much  by  stable  monetary  conditions.  Our 
foreign  trade  is  already  beginning  to  feel  the  effect 
of  greater  financial  stability.  The  power  of  return- 
ing confidence,  with  the  accumulated  energy  of  years 
of  inactivity,  multiplied  by  the  modern  facilities  for 
production  and  transportation,  will  create  an  era  of 
prosperity  in  international  trade  unknown  in  the 
history  of  the  world. 


CHAPTER   XII 

WALL   STREET 


THE  name  "Wall  Street"  is  but  a  symbol 
used  to  signify  the  American  money  market. 
As  the  dollar-mark  placed  before  long  rows 
of  figures  throws  a  golden  luster  on  the  column,  so 
the  name  of  the  little  great  thoroughfare  that  runs 
from  the  high  gate  of  old  Trinity  down  to  the  East 
River  lends  its  own  significance  to  the  surrounding 
locality.  Nassau,  Pine,  Cedar,  Broad,  New,  Wil- 
liam, and  Hanover  streets  are  all  as  truly  parts  of 
the  expanded  Wall  Street  of  to-day  as  their  bankers, 
brokers,  and  business  are  a  part  of  the  great  Ameri- 
can money  market.  Around  the  Wall  Street  of  a 
century  ago  as  a  nucleus  have  gathered  the  great 
moneyed  interests  of  the  New  World,  and  it  is  they, 
rather  than  any  particular  street,  that  are  designated 
to-day  by  the  term  "  Wall  Street."  Yet,  if  the  his- 
toric old  street  has  broadened  somewhat  in  signifi- 
cance and  application  during  the  past  century,  it  has 
still  lost  none  of  its  identity.  Since  the  memorable 
day  in  1789  when  George  Washington,  standing  on 
the  steps  of  the  old  Federal  House,  took  the  oath 
as  first  President  of  these  United  States,  the  street 
he  then  surveyed  has  been  a  center  for  every  great 
national  enterprise.  It  has  been  the  one  fixed  point 
around  which  have  revolved  the  great  financial 
panics  that  swept  the  land,  and  it  has  also  been  the 
source  whence  have  sprung  many  of  the  greatest  of 
those  undertakings  which  have  rendered  our  country 
and  the  age  alike  famous. 

Something  over  two  centuries  ago  green  rolling 
fields  stretched  from  Broadway  to  the  East  River. 
Along  the  ridge  of  the  hill  at  the  head  of  Broad 
Street  stood  the  high  palisade  of  stout  timber  de- 
fending the  town  against  any  sudden  incursion  of 
the  red  warriors  who  still  prowled  the  neighboring 
land.  This  palisade,  which  gave  its  name  to  Wall 
Street,  has  long  been  gone.  It  outlived  the  red 
men,  and  was  finally  torn  down,  the  line  it  made 
being  laid  out  and  named  Wall  Street.  To-day  it 


67 


and  its  significance  are  forgotten,  as  are  those  fair- 
haired,  red-cheeked  Dutch  maidens,  who,  tripping 
down  the  foot-path  to  the  water,  bearing  the  house- 
hold linen  to  the  wash,  gave  their  name  to  Maiden 
Lane ;  or  the  jolly  old  burghers,  clad  in  baggy  knee- 
breeches  and  smoking  long  pipes,  who,  in  the  days 
of  doughty  Peter  Stuyvesant,  played  their  game  of 
bowls  upon  the  smooth  turf  of  Bowling  Green.  It 
is  only  in  the  few  names  like  these  still  left  that  we 
find  how  historic  are  many  old  city  ways.  Among 
them  all  Wall  Street  stands  with  the  earliest.  There, 
when  the  old  Town  House  was  demolished  in  1699, 
was  built,  upon  the  site  of  the  present  Sub-Treasury, 
a  new  City  Hall,  the  building  which  was  fitted  up 
six  years  after  the  close  of  the  Revolution  for  the 
meeting-place  of  Congress,  and  at  which  President 
Washington  was  inaugurated. 

The  importance  of  Wall  Street,  therefore,  may  be 
dated  from  1700,  when  the  affairs  of  the  municipal- 
ity centered  there.  By  the  middle  of  the  century  it 
was  a  "  grand  street "  with  handsome  private  resi- 
dences, the  seat  of  the  colonial  legislature,  and  the 
central  point  for  all  the  political  and  social  life  of 
the  day.  The  State  legislature,  too,  met  in  Wall 
Street  until  the  capital  was  removed  from  New  York 
to  Albany,  and  for  fully  fifty  years  the  official  life  of 
New  York  converged  there.  Nevertheless  the  tide 
of  affairs  was  slowly  rising  in  the  old  thoroughfare, 
and  the  private  residences  began  to  give  way  before 
the  offices  of  the  great  merchants,  who  were  forsak- 
ing lower  Broadway  and  the  smaller  streets  down- 
town. The  shopkeepers  and  small  traders,  however, 
did  not  venture  upon  this  ground.  It  was  only  the 
great  merchant  princes  and  moneyed  traders  who 
first  planted  the  standards  of  business  in  Wall 
Street.  To  them  naturally  came  others,  and  the 
Bank  of  New  York,  of  which  General  Alexander 
McDougal  was  the  first  president,  was  in  existence 
but  a  few  years  when  it  was  removed  to  Wall  Street, 


68 


ONE   HUNDRED  YEARS   OF  AMERICAN   COMMERCE 


where  it  established  itself  in  1791  at  the  corner  of 
William  Street,  being  the  first  bank  in  New  York  City 
and  the  first  on  Wall  Street. 

Had  the  wishes  of  the  Bank  of  New  York  been 
respected  there  might  never  have  been  another  one 
in  the  Street;  for  its  influence  was  strong  in  the 
legislature,  and  for  years  it  was  impossible  for  any 
other  banking  charter  to  be  obtained.  The  estab- 
lishment of  the  second  bank  in  Wall  Street,  and  the 
State  as  well,  came  about  in  a  most  curious  manner, 
and  the  credit  of  its  accomplishment  belongs  to  that 
shrewd  lawyer,  Aaron  Burr.  He  introduced  in  1799 
into  the  legislature  a  bill  to  charter  the  Manhattan 
Company,  a  corporation  of  large  capital  which  pro- 
posed constructing  a  system  of  water-works.  Yellow 
fever,  then  an  annual  scourge,  caused  the  people  to 
welcome  gladly  any  improved  sanitary  regulation, 
and  pure  water  was  considered  of  the  utmost  im- 
portance. Viewing  the  matter  thus,  even  the  watch- 
ful politicians  who  were  assembled  in  the  legislative 
halls  saw  little  to  object  to  in  the  new  company,  and 
it  was  chartered  accordingly.  One  brief  clause  had 
been  overlooked,  however,  and  in  it  lay  the  pith  of 
the  cunning  Burr's  success.  This  clause,  after  recit- 
ing that  the  company's  capital  should  be  expended 
in  the  construction  of  a  system  of  water-supply, 
provided  that  if  any  surplus  should  remain  it  could 
be  used  in  any  business  "  not  unlawful."  Under  this 
head  banking  most  certainly  fell,  and  the  Manhattan 
Company,  finding  speedily  that  they  had  a  surplus, 
used  it  in  founding  their  bank  that  same  year,  the  lo- 
cation chosen  being  at  what  was  then  23  Wall  Street. 

One  thing,  however,  must  be  said,  which  is  that 
the  Manhattan  Company  was  equally  prompt  in 
providing  its  water-supply.  The  water  was  ob- 
tained from  an  old  spring,  and  the  reservoir  was 
located  near  the  corner  of  Reade  and  Center  streets, 
where  it  remains  to  this  day,  an  odd-looking,  old- 
fashioned  cistern  enough,  but  still  capable  of  pro- 
viding water  as  it  did  nearly  a  century  ago,  when  it 
was  considered  almost  as  great  an  engineering  feat 
as  the  present  Croton  Aqueduct.  It  is  years  since 
water  has  been  used  from  it.  The  pipes  by  which 
the  Manhattan  Company  carried  water  through  the 
town  were  made  from  solid  logs,  the  centers  care- 
fully bored  out  and  the  lengths  jointed  together. 
Occasionally,  even  now,  some  contractor  digging  in 
the  lower  streets  of  the  city  brings  to  light  one  of 
these  old  pipe  logs,  laid  so  long  ago ;  and  several 
sections  thus  exhumed  have  been  bronzed,  and  are 
carefully  kept  in  the  Manhattan  Bank  as  mementos 
of  the  great  work  in  the  earlier  days. 

The  choice  by  these  two  banks— the  only  ones  in 


the  city — of  Wall  Street  for  their  location  must  be 
regarded  as  the  final  election  of  that  street  as  the 
home  of  American  finance.  The  United  States 
Branch  Bank  was  opened  there  in  1792  ;  the  Mer- 
chants' was  there  in  1805,  and  the  Mechanics'  Bank 
in  1810.  Meanwhile,  too,  another  potent  factor 
in  centering  business  interests  in  Wall  Street  was 
introduced  by  the  erection  in  1794  of  the  Tontine 
Coffee-House.  Here  at  noon  every  day  gathered 
the  merchants  from  their  counting-rooms  and  ware- 
houses to  discuss  the  news  of  the  day,  compare 
notes,  chat,  and  even  make  trades.  At  the  plain 
old  bar  in  the  center  of  the  great  room  the  best 
liquors,  at  a  time  when  good  liquor  was  the  rule, 
were  to  be  had ;  and  sedate  old  merchants,  with  a 
piece  of  the  thirst-provoking  salt  codfish  or  a  dry 
cracker  in  one  hand,  and  a  steaming  glass  of  old 
Jamaica,  oily  schnapps,  or  sound  old  port  in  the 
other,  gravely  exchanged  the  courtesies  of  the  day. 
"  High  'Change  "  they  called  this  hour,  and,  entirely 
apart  from  its  convivial  features,  the  benefits  of  this 
general  intermingling  of  the  business  men  of  the  city 
were  found  to  be  so  important  that  a  merchants' 
exchange,  having  the  Tontine  Coffee-House  as  its 
headquarters,  was  formed.  Thus  did  the  Exchange 
first  manifest  itself  in  Wall  Street,  and  quotations 
now  disseminated  broadcast  by  electricity  were  then 
obtained  by  word  of  mouth,  the  Tontine  Coffee- 
House  being  large  enough  to  contain  all  the  great  in- 
terests of  the  New  York  business  world  of  1795. 

In  this  latter  year,  with  which  the  century  under 
discussion  begins,  the  banking  facilities  of  New 
York,  exclusive  of  the  branch  office  of  the  Bank  of 
the  United  States,  aggregated  considerably  less  than 
$1,000,000,  and  business  was  synonymous  with  for- 
eign trade.  The  merchants  were  the  men  of  affairs, 
and,  except  in  foreign  commerce  or  domestic  traffic, 
there  were  few  ways  to  invest  idle  funds.  The 
buying  of  land — real-estate  investment — had  not 
then  become  general,  and  manufactures  were  almost 
unknown,  at  least  as  a  field  for  the  investment  of 
large  capital.  Gradually  the  very  extension  of 
trade  and  business  requirements  began  to  bring 
complexities.  Capital  increased,  and  the  distinctive 
function  of  the  banker  began,  which,  according  to 
Ricardo,  is  "using  the  money  of  others."  Banks 
increased,  insurance  companies  sprang  up,  and  the 
management  of  money  as  apart  from  its  use  in  the 
channels  of  trade  gradually  became  more  and  more 
distinct.  Private  bankers,  always  in  existence,  gave 
up  little  by  little  the  mercantile  branches  of  their 
business,  brokers  who  bought  and  sold  for  others  on 
commission  could  be  found  as  easily  in  Wall  Street 


JOHN  P.  TOWNSEND. 


ONE   HUNDRED   YEARS  OF  AMERICAN    COMMERCE 


as  at  the  present  time,  and  by  1810  all  the  various 
elements  found  on  'Change  to-day  could  be  observed 
working  themselves  into  distinctness. 

One  of  the  earliest  of  the  great  merchants  and 
bankers  who  ruled  on  Wall  Street  in  1796  was 
Nathaniel  Prime,  better  known  as  "  Nat "  Prime. 
Later  on  he  was  the  head  of  the  famous  banking- 
house  of  Prime,  Ward  &  King,  a  firm  as  great  in 
its  day  as  any  whose  name  rules  the  Street  now. 
"  Nat "  Prime  was  a  hard-headed,  picturesque  old 
figure,  who  had,  rumor  said,  been  a  coachman  in 
Boston  in  his  younger  years.  A  keen  fellow,  he  had 
saved  and  loaned  at  interest  until  he  gathered  a 
small  sum.  He  was  doing  a  small  brokerage  busi- 
ness in  New  York,  when,  it  is  related,  he  met  at  a  din- 
ner-party one  evening  a  rich  Southern  planter.  The 
conversation  turned  on  money-making,  and  Prime 
remarked  that  if  he  had  $5000  he  would  double  it 
in  a  year.  The  planter  asked  him  what  security  he 
could  give  for  such  a  loan.  "  The  word  of  an  hon- 
est man,"  replied  Prime ;  and  on  that  collateral  the 
Southerner  advanced  him  the  money.  So  Nathaniel 
Prime  got  his  start.  Within  the  year  he  had  paid 
his  benefactor  back ;  but  he  gave  no  more  than  was 
strictly  due ;  and  when,  some  years  later,  the  same 
Southerner,  being  in  financial  straits,  applied  to  him 
for  a  loan  on  the  security  he  himself  had  given,  he 
refused  him.  Gratitude  was  a  debt  the  law  did 
not  recognize  nor  "  Nat "  Prime  pay,  but  in  his 
financial  dealings  he  was  always  the  very  soul  of 
integrity. 

From  these  beginnings  to  being  head  of  the 
greatest  banking-house  in  New  York  and  a  king  in 
Wall  Street  was  a  career,  however,  that  showed  the 
business  qualities  of  Nathaniel  Prime ;  and  in  the 
dawning  importance  of  that  famous  street  his  was 
one  of  the  most  prominent  figures.  One  of  the  first 
significant  events  showing  the  extending  influence 
of  Wall  Street  as  a  financial  center  was  the  famous 
conference  of  its  four  great  powers,  Nathaniel 
Prime,  John  Jacob  Astor,  John  Robins,  and  John 
Hone,  when  the  State  of  Ohio,  in  1825,  contemplat- 
ing internal  development  on  a  large  scale,  applied 
for  a  heavy  loan.  Two  days  and  a  night  did  this 
session  last,  and  then  the  first  great  ultimatum  of 
Wall  Street  magnates  went  forth  to  the  Ohio  ambas- 
sadors. Enact  into  statute  certain  stipulated  con- 
cessions and  the  money  will  be  forthcoming,  was  the 
tenor  of  this  decision.  Back  to  Ohio  went  the  dele- 
gates. The  legislature  deliberated,  and  passed  the 
required  bills,  and  from  Wall  Street  to  Ohio  went  a 
vast  loan.  This  first  syndicate  was  one  that  might 
have  been  a  little  more  peremptory  in  stating  its 


terms  than  those  of  to-day,  but  it  was  equally 
prompt  in  living  up  to  its  agreements. 

The  development  of  the  business  of  Wall  Street 
as  a  financial  power  brought  in  its  train  a  system  of 
operations  based  upon  the  exchange  of  funds,  the 
representation  in  stocks  of  intrinsic  values,  and  the 
acknowledgment  in  bonds  of  indebtedness  and  lien. 
Around  these  three  simple  quantities  has  grown  the 
multiplex  money  market  of  to-day.  There  were  few 
stocks,  or  bonds  either,  in  1795;  nevertheless  the 
brokers  were  already  on  the  Street,  and  Bleecker's 
famous  old  auction-room  was  the  first  place  where 
the  early  bulls  and  bears  resorted.  It  was  a  small 
enough  stock-list  they  had  to  operate  with  in  those 
days,  and  seemingly  simple  to  master.  The  two  or 
three  banks  and  insurance  companies  then  existing 
were  quoted,  and  the  three  or  four  classes  of  gov- 
ernment secuirties,  but  these  were  all.  Sudden  or 
extreme  fluctuations,  except  in  time  of  war,  were 
almost  unknown,  and  an  operator  who  conned  his 
list  well  on  Monday  was  generally  posted  for  the 
week.  Upon  such  a  field  as  this  did  the  great  New 
York  Stock  Exchange  make  its  first  appearance. 
Under  an  old  buttonwood-tree  standing  in  front  of 
60  Wall  Street  the  early  brokers  of  New  York  met 
one  day  in  1792,  and  set  forth  the  purposes  and 
obligations  of  the  association  in  the  following 
agreement : 

"  We,  the  subscribers,  brokers  for  the  purchase  and 
sale  of  public  stock,  do  hereby  solemnly  promise 
and  pledge  ourselves  to  each  other  that  we  will  not 
buy  or  sell  from  this  date,  for  any  person  whatso- 
ever, any  kind  of  public  stocks  at  a  less  rate  than  one 
quarter  of  one  per  cent,  commission  on  the  specie 
value,  and  that  we  will  give  a  preference  to  each 
other  in  our  negotiations.  In  testimony  whereof 
we  have  set  our  hands,  this  seventeenth  day  of 
May,  at  New  York,  1792.  Lemuel  Bleecker,  Hugh 
Smith,  Armstrong  &  Barnewell,  Samuel  Marsh, 
Bernard  Hart,  Sutton  &  Hardy,  Benjamin  Seixas, 
John  Henry,  John  A.  Hardenbrook,  Samuel  Beebee, 
Alexander  Zuntz,  Andrew  D.  Barclay,  Ephraim 
Hart,  Julian  McEvers,  G.  N.  Bleecker,  Peter 
Anspach,  Benjamin  Winthrop,  John  Ferrers,  Isaac 
M.  Gomez,  Augustine  H.  Lawrence,  John  Bush, 
Charles  McEvers,  Jr.,  Robinson  &  Hartshorn, 
David  Reedy." 

This  agreement  was  the  only  one  by  which  the 
members  were  bound  until  1820,  when  daily  meet- 
ings and  the  regular  call  of  stocks  began.  The 
board  had  its  permanent  headquarters  after  1825  in 
the  Old  Merchants'  Exchange;  but  after  that  was 
destroyed  by  fire  it  established  itself  in  one  of  the 


70 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


Jauncey  buildings,  whence  it  removed  in  1842  to 
the  New  Merchants'  Exchange,  now  the  Custom- 
House.  There  it  remained  until  1853.  Until  that 
time  the  board  had  been  the  closest  of  corporations, 
its  membership  being  governed  by  iron-clad  rules. 
Financial  news  agencies  were  unknown  in  those 
days,  and  the  board  kept  its  proceedings  a  profound 
secret,  violation  of  this  secrecy  being  punished  by 
expulsion.  So  intense  was  the  curiosity  over  the 
proceedings  of  this  body  that  an  Open  Board,  which 
had  been  organized  in  1837,  took  a  building  adjoin- 
ing and  dug  the  bricks  out  of  the  wall  for  the  pur- 
pose of  spying  out  what  was  going  on. 

The  board  removed  from  the  Merchants'  Ex- 
change Building  in  1853  to  a  room  in  the  old  Corn 
Exchange  Bank  Building  at  Beaver  and  William 
streets.  In  1857,  the  year  of  the  great  panic,  the 
board  changed  its  headquarters  to  the  Daniel  Lord 
Building,  with  entrances  on  William  and  Beaver 
streets.  Here  it  was  that  some  of  the  great  specu- 
lators of  the  day  flourished.  Among  these  were 
Daniel  Drew,  Jacob  Little,  and  Morse,  known  as 
the  "  lightning  calculator,"  who  made  and  lost  a 
fortune  of  millions  in  a  little  over  a  year.  The  rule 
enjoining  secrecy  still  continuing  in  force,  it  is  a 
fact  of  record  that  $100  a  day  was  freely  offered 
for  the  privilege  of  listening  at  the  keyhole  during 
the  time  of  the  calls.  The  board  continued  to  hold 
its  meetings  in  the  Lord  Building  until  1865,  when 
it  removed  to  its  present  location.  During  the  war 
period  the  Stock  Exchange,  with  a  view  to  assisting 
the  government,  prohibited  its  members  from  selling 
government  bonds  "short,"  and  also  forbade  them  all 
dealings  in  gold.  The  later  action  led  to  the  forma- 
tion of  the  Gold  Exchange,  which,  although  resulting 
in  a  loss  of  many  millions  of  dollars  to  its  members, 
was  taken  for  purely  patriotic  purposes.  A  second 
Open  Board  of  Brokers  was  organized  in  1863,  with 
headquarters  in  a  basement  in  William  Street,  called 
the  "  Coal-Hole."  So  rapidly  did  its  business  in- 
crease that  it  soon  took  more  spacious  accommoda- 
tions in  Broad  Street,  adjoining  the  Stock  Exchange. 
The  competition  continued  until  1869,  when  the  old 
board  called  a  truce.  Amicable  negotiations  led  to 
a  consolidation  of  the  Stock  Exchange,  the  Open 
Board,  and  the  United  States  Government  Board, 
the  result  being  the  strongest  public  financial  associ- 
ation in  the  country,  and  one  of  the  most  important 
in  the  world.  William  H.  Neilson  was  the  first 
president. 

The  business  of  this  exchange  has  become  to-day 
much  greater  than  that  of  the  combined  exchanges 
of  the  kind  existing  in  the  rest  of  the  country.  It  is 


the  very  heart  of  Wall  Street,  and  its  functions  are  as 
vital  to  the  development  and  prosperity  of  the  country 
as  to  the  money  market.  It  affords  a  constant  and 
regular  market  for  the  securities  of  the  great  corpora- 
tions, and  indexes  their  value  in  quotations  of  actual 
bids  and  sales.  Without  such  facilities  as  it  affords, 
the  shares  of  these  corporations,  aggregating  a  total 
par  value  well  up  in  the  billions,  would  move  so 
slowly  that  great  enterprises  would  often  lag  from 
sheer  lack  of  capital.  Again,  transactions  would  be 
vague,  only  known  to  the  public  when  the  interested 
parties  were  willing,  and  the  door  would  be  opened 
to  manipulation  and  fraud  almost  unlimited  were 
the  safeguard  it  affords  to  be  removed.  The  Stock 
Exchange,  it  is  true,  cannot  control  the  relation  of 
values  to  prices,  nor  can  it  direct  the  management 
of  corporations  by  their  officials ;  but  it  can  and 
does  secure  a  fair,  free,  and  absolutely  open  market, 
where  the  dealings  are  matters  of  record  and  public 
knowledge.  It  can  and  does  further  insist  that  all 
stocks  dealt  in  on  its  floor  shall  have  certain  quali- 
fications warranting  their  genuineness,  and  its  "  list- 
ing" committee  examines  and  investigates  the 
claims  of  every  new  security  brought  before  it,  be- 
fore it  is  allowed  on  the  list  of  those  in  which 
members  may  deal.  In  admitting  a  security  to  its 
list  the  Stock  Exchange  does  not  recommend  it  to 
the  public ;  it  simply  places  it  among  the  honest 
possibilities  of  the  market,  to  stand  or  fall  by  its 
own  merit.  In  the  unlisted  securities  dealt  in  by 
special  privilege  of  the  exchange  the  action  of  the 
board  differs  but  in  degree,  and  any  stock  in  which 
transactions  are  allowed,  however  slight  its  intrinsic 
value  may  be,  is  stamped  as  not  bogus. 

In  the  exercise  of  these  functions  the  Stock  Ex- 
change has  come  to  stand  as  the  great  regulator  of 
the  market  for  securities,  and  its  transactions,  fully 
reported,  serve  as  the  standard  by  which  values  are 
established.  In  the  internal  economy  of  the  Stock 
Exchange  every  method  best  adapted  to  conserve 
the  ends  of  straightforward  and  legitimate  business 
investment  has  been  adopted.  Among  the  more 
important  changes  of  the  last  thirty-five  years  have 
been  the  following:  the  rule  requiring  the  registry 
of  stocks,  in  1869  ;  the  abandonment  of  the  regular 
call  of  stocks,  in  1875;  the  rule  authorizing  the 
buying  in,  if  not  delivered  when  due,  of  contracts 
of  active  stocks,  in  1884;  the  establishment  of  the 
Department  of  Unlisted  Securities,  in  1885;  and 
finally  the  establishment  in  1892  of  its  own  Clearing- 
House,  where  all  active  stocks  dealt  in  are  daily 
cleared.  The  publicity  the  Stock  Exchange  thus 
allows  to  all  transactions,  the  centralization  it  affords 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


71 


to  the  great  interests  of  the  country,  and  the  regula- 
tions it  imposes  upon  all  operations  are  among  the 
greatest  advantages  it  confers.  Its  liberal  enterprise, 
coupled  with  the  strictest  integrity,  aided  by  the 
advantages  mentioned,  has  most  naturally  placed 
it  in  the  van  of  organizations  of  this  character  in 
the  whole  world. 

Leaving  now  the  consideration  of  the  component 
parts  of  Wall  Street,  and  taking  the  Street  in  its  true 
significance  as  one  of  the  greatest  financial  centers 
in  the  world,  its  history  becomes  so  vast,  so  inter- 
woven with  the  woof  of  national  affairs  and  pros- 
perity, that  it  will  only  be  possible  to  review  it  in  its 
more  important  phases.  The  War  of  1812,  which, 
treading  on  the  heels  of  the  Embargo,  brought  the 
first  set-back  to  the  new  Republic,  found  Wall  Street 
still  so  identified  with  the  mercantile  interests  that 
its  prostration  with  them  at  the  close  of  the  struggle 
was  only  natural.  The  heavy  war  loans  floated  by 
the  government,  however,  had  found  their  largest 
takers  in  Wall  Street,  and  that  at  a  time  when  men 
needed  all  their  faith  and  patriotism  to  believe  even 
in  the  eventual  solvency  of  the  country.  This  was 
the  first  time  that  the  men  and  institutions  of  Wall 
Street  came  to  the  nation's  assistance.  Looking 
back  and  recalling  the  era  of  prosperity  that  followed 
the  war  and  the  reestablishment  of  the  United  States 
Bank, — a  prosperity  that  in  twenty  years  paid  off  the 
great  war  debt  and  amassed  a  surplus  of  nearly 
$50,000,000, — we  can  see  that  their  confidence  was 
not  misplaced.  In  this  same  period,  too,  during 
which  De  Witt  Clinton,  in  the  face  of  the  most 
violent  opposition,  achieved  the  construction  of  the 
great  Erie  Canal  and  placed  commercial  advantage 
in  the  hands  of  New  York,  the  evolution  of  Wall 
Street  was  rapid.  For  twenty  years  its  progress  was 
unimpeded,  and  then  came  the  great  fire  of  Decem- 
ber, 1835.  Millions  of  intrinsic  value  went  up  in 
smoke  and  flame,  and  millions  more  followed  in  lost 
time  and  opportunity  before  conditions  could  re- 
adjust themselves.  Every  insurance  company  in 
Wall  Street  gave  up  without  recourse  before  the 
overwhelming  loss,  and  the  banks  felt  most  keenly 
the  ruin  of  their  best  customers,  the  merchants. 

Just  at  this  juncture  grim  old  Andrew  Jackson 
demolished  at  a  blow  the  great  national  bank.  It 
was  the  match  to  the  train,  although  few  saw  the 
mine  it  would  explode.  Between  $40,000,000  and 
$50,000,000  distributed  to  the  State  banks  through- 
out the  country  gave  a  momentary  prosperity  that 
found  vent  in  the  gigantic  bubble  of  land  specula- 
tion which  the  Specie  Circular  so  woefully  pricked. 
Banks  were  asked  to  redeem  their  notes,  but  could 


not,  and  then  came  the  panic  of  1837.  Wall  Street 
felt  the  crash,  but  nevertheless  her  bankers  were  the 
first  to  reopen  their  doors,  and  her  capitalists  the 
first  to  regain  their  confidence.  Long  and  slow  was 
the  process  of  recuperation  in  the  country  at  large ; 
but  through  it  all,  with  the  banks  of  the  West  and 
South  opening  one  day  only  to  suspend  the  next, 
Wall  Street  continued  evenly  on  its  course,  and  the 
completion  in  1851  of  the  Erie  Railroad  to  Dunkirk 
shows  how  well  her  capitalists  had  retained  their 
faith  and  their  courage. 

The  long  drag  of  ten  years,  succeeded  by  an 
equal  period  of  prosperity  struggling  against  bad 
banking  and  ill-regulated  finance,  culminated  in 
1857.  A  branch  office  of  the  Ohio  Life  and  Trust 
Company  was  located  in  Wall  Street,  and  from 
there  on  the  memorable  24th  of  August,  1857,  issued 
the  news  of  its  suspension.  Like  a  house  of  cards 
the  great  financial  structure  of  the  country  came 
tumbling  down.  Over-importations,  with  no  com- 
prehension of  the  effects  of  heavy  and  continued 
gold  shipments,  joined  to  over-speculation  and  high 
prices,  may  be  said  to  have  been  primarily  the  cause 
of  the  disaster.  It  was  more  severely  felt  in  Wall 
Street  than  its  predecessor  of  a  score  of  years  before, 
for  the  reason  that  it  affected  wider  and  more  gen- 
eral interests.  The  railroad,  initiated  in  1830, 
accepted  by  1835,  and  being  pushed  in  every  direc- 
tion by  1857,  was  an  interest  with  which,  as  to-day, 
Wall  Street  was  identified.  By  means  of  the  tele- 
graph, then  lately  brought  into  use,  the  dimensions 
of  the  panic  were  thoroughly  known  in  a  week. 
Failures  aggregating  $291,750,000  were  reported 
for  the  year,  and  Wall  Street  set  itself  to  work  to 
repair  the  damage.  Of  what  might  have  been,  had 
the  troubles  of  1860  never  arisen,  no  one  can  say; 
of  what  did  occur  history  tells  us  plainly.  The 
government,  harassed  and  embarrassed,  turned  to 
Wall  Street,  and  it  did  not  seek  in  vain.  Never  did 
a  threatened  power  obtain  freer  or  more  speedy 
relief.  Obligations  were  fast  maturing  which  the 
government  found  no  means  to  meet.  Besides  this, 
vast  sums  were  needed  to  carry  on  military  opera- 
tions. Not  only  the  national  credit,  but  the  national 
existence,  was  threatened. 

In  this  emergency,  Salmon  P.  Chase,  Secretary 
of  the  Treasury,  communicated  with  John  J.  Cisco, 
the  subtreasurer  of  New  York,  to  use  his  utmost 
endeavors  to  raise  the  money  necessary  to  sustain 
the  nation's  credit.  Mr.  Cisco  informed  the  banks 
of  the  condition  of  the  national  finances  and  of  his 
instructions  from  Washington.  He  pointed  out  to 
the  leading  operators  and  financiers  that  within  a 


72 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


few  days  interest  on  the  accruing  obligations  of  the 
government  would  have  to  be  paid  or  it  must  neces- 
sarily go  to  protest.  This  was  clearly  one  of  the 
most  critical  moments  in  the  history  of  the  nation, 
and  the  crisis  demanded  sound  judgment  and 
prompt  action.  The  gravity  of  the  situation  was 
clear  to  the  bankers.  The  collapse  of  the  govern- 
ment's credit  would  endanger  the  perpetuity  of  our 
very  institutions.  The  foundation  of  all  security 
was  threatened,  and  the  destruction  of  all  values 
was  imminent. 

The  outlook  throughout  the  Union  at  that  time 
was  dark,  while  all  Europe  looked  on  either  in 
apprehension  or  in  hope  that  our  political  fabric 
was  going  to  pieces.  But  Wall  Street  took  prompt 
and  united  action  to  extricate  the  government  from 
its  perilous  position.  The  spirit  of  patriotism  was 
everywhere,  and  the  great  financial  institutions  of 
the  country  responded  with  a  heartiness  that  showed 
their  faith.  The  old  Bowery  Savings-Bank,  one  of 
the  richest,  as  it  was  one  of  the  first,  of  such  estab- 
lishments in  New  York,  voted  in  February,  1861,  to 
loan  one  half  of  all  its  funds  to  the  government,  and 
this  was  accordingly  done.  It  is  difficult  at  the  pres- 
ent time,  when  four  per  cent,  bonds  of  the  United 
States  are  selling  daily  in  the  market  at  twenty-one 
per  cent,  premium,  to  estimate  the  courage  that  was 
necessary  at  that  period  to  resolve  on  such  a  course 
as  that  followed  by  this  bank.  Government  securi- 
ties paying  as  high  as  seven  and  three  tenths  per 
cent,  interest  were  at  that  time  at  a  substantial  dis- 
count, and  it  is  matter  of  history  that  the  issue,  a 
year  later,  of  legal-tender  notes,  or  "greenbacks," 
fundable  in  six  per  cent,  bonds,  was  largely  influ- 
enced by  the  fact  that  except  by  such  seemingly 
arbitrary  methods  the  loan  could  not  have  been  se- 
cured with  either  certainty  or  rapidity. 

In  the  history  of  war-time  finance,  and  the  mea- 
sures adopted  under  stress  of  the  sternest  necessity, 
none  was  more  lasting  in  its  effects,  nor  greater  in 
the  lengths  to  which  it  was  ultimately  carried,  than 
this  authorization  of  the  issue  of  legal-tender  notes 
—"greenbacks."  When,  in  the  autumn  of  1861, 
the  bankers  of  the  country  had  paid  to  the  govern- 
ment the  last  instalment  of  $50,000,000  of  the 
$150,000,000  in  gold  loaned,  their  condition  was 
one  of  extreme  exhaustion.  This  money,  disbursed 
by  the  treasury  to  the  army  and  navy,  returned  to 
the  banks  but  slowly,  and  the  result  of  the  drain 
that  it  had  produced  was  seen  when,  on  December 
30,  1 86 1,  the  banks  suspended  specie  payment. 
Of  this  $150,000,000  in  gold  thus  lent  the  govern- 
ment in  the  time  of  its  direst  need  during  the  dark 


days  following  the  disaster  of  Bull  Run,  Wall  Street 
may  pride  itself  on  the  fact  that  $105, 000,000  came 
from  its  associated  banks.  The  suspension  of  the 
banks  complicated  the  financial  situation  seemingly 
beyond  extrication.  The  maintenance  of  the  army 
and  navy,  which  was  synonymous  with  maintaining 
the  Union  itself,  was  dependent  upon  a  vast  sum 
being  raised  within  three  months.  Therefore  it  was 
as  an  expedient  dictated  solely  by  necessity  and  not 
choice  that  the  first  Legal-Tender  Act,  providing 
for  an  issue  of  treasury  or  government  notes  to  the 
value  of  $150,000,000,  redeemable  in  six  per  cent, 
twenty-year  gold  bonds,  was  passed,  and  signed  by 
President  Lincoln,  February  25,  1862.  $50,000,000 
of  this  issue,  however,  was  to  be  in  lieu  of  the  trea- 
sury demand  notes  authorized  the  previous  July. 
An  issue  of  $500,000,000  in  bonds  bearing  six  per 
cent,  interest,  and  redeemable  in  five  and  payable 
in  twenty  years,  was  also  authorized  by  this  act 
for  funding  purposes.  The  first  legal-tender  notes 
issued  under  the  act  bore  the  date  March  10,  1862, 
and  none  were  of  smaller  denomination  than  $5. 
Their  effect  in  easing  the  pressure  upon  the  treasury 
was  immediate.  Within  a  month  another  and 
smaller  issue  was  declared,  and  on  July  nth  a  sec- 
ond issue  of  $150,000,000  in  notes  of  the  same  kind 
was  authorized,  and  bills  of  smaller  denomination 
than  $5  were  authorized.  On  March  3,  1863,  a  bill 
was  passed  authorizing  the  $900,000,000  six  per 
cent,  loan ;  but,  at  the  urgent  request  of  Secretary 
Chase,  a  clause  was  inserted  leaving  it  optional  with 
the  Secretary  of  the  Treasury  to  permit  the  right  of 
holders  to  fund  greenbacks  into  six  per  cent,  gold 
bonds.  Under  this  new  power  greenbacks  were 
funded  into  sixes  until  January  21,  1864,  when,  the 
original  $500,000,000  issue  of  bonds  having  been 
all  taken  up,  the  secretary  decided  that  greenbacks 
in  future  could  only  be  funded  in  the  five  per  cents. 
The  effect  of  this  decision  was  to  instantly  and 
seriously  depress  the  value  of  the  enormous  paper 
currency,  and  in  it  may  be  found  the  cause  of  much 
of  the  manipulation  which,  using  the  premium  on 
gold  as  a  leverage,  shook  and  deranged  values  in 
the  money  market  for  so  many  years. 

It  is  thirty  years  now  since  the  war  closed,  and 
during  that  time  there  has  been  so  much  of  notable 
importance  linked  with  Wall  Street  that  only  the 
more  prominent  events  need  be  mentioned.  The 
speculation  in  gold,  giving  the  opportunity  to  un- 
scrupulous operators  to  manipulate  the  stock  market 
for  their  own  ends,  culminated  in  "  Black  Friday," 
September  24,  1869,  when  many  in  Wall  Street 
began  business  in  the  morning  as  rich  men  and 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


73 


went  home  ruined.  Many  versions  of  the  causes 
li.ive  been  given;  but  one  thing  remains  certain: 
that  had  not  unnatural  financial  conditions  permitted 
the  famous  Gold  Room  to  exist,  the  disaster  would 
never  have  occurred.  It  is  always  a  situation  of  in- 
calculable danger,  when  a  nation's  paper  is  at  a  dis- 
count in  her  own  markets.  The  next  few  years  saw 
no  abatement  of  the  troubles  by  which  the  financial 
world  was  beset,  and  the  rally  which  followed  1869 
was  but  the  comparative  calm  preceding  the  storm 
which  burst  four  years  later.  The  great  banking- 
house  of  Jay  Cooke  &  Co.,  staggering  almost  single- 
handed  under  the  terrible  burden  of  the  Northern 
Pacific  Railroad,  precipitated  the  trouble  in  1873. 
Wall  Street  knew  that  a  catastrophe  was  imminent, 
but  how  to  avert  it  was  a  problem. 

As  a  bit  of  the  unwritten  history  of  that  time,  it 
is  related  that  a  representative  of  one  of  the  great 
banking-houses  in  Wall  Street,  having  formulated  a 
plan  to  relieve  the  tension,  went  to  Washington  to 
lay  it  before  the  Secretary  of  the  Treasury,  William 
A.  Richardson.  The  latter  declined  to  believe  in 
the  gravity  of  the  situation,  and  the  banker  gained 
an  audience  with  President  Grant,  to  whom  he  re- 
lated his  fears  of  impending  trouble  and  outlined 
certain  measures  for  relief.  So  much  was  the  Pres- 
ident impressed  by  the  imminence  of  peril  that  he 
not  only  gave  the  banker  a  letter  to  the  Secretary, 
requesting  that  official  to  give  him  a  careful  hear- 
ing, but  the  President  at  once  ordered  the  with- 
drawal of  his  own  private  funds,  a  great  part  of 
which,  as  it  happened,  was  on  deposit  with  the  firm  of 
Jay  Cooke  &  Company.  How  fortunate  this  action 
of  the  President's  was  was  shown  when  the  very 
next  day  the  failure  of  the  great  banking-house  was 
announced. 

The  panic  which  this  failure  brought  on  was 
sharp,  as  was  the  rally  which  followed  and  overdid 
itself  about  ten  years  later,  when  over-extension 
of  railroads  and  incautious  speculation  brought  a 
relapse.  In  May,  1884,  the  failures  of  Grant  & 
Ward  and  the  Marine  Bank  first  alarmed  the  Street. 
A  few  days  elapsed  without  further  serious  trouble, 
and  then  the  Metropolitan  Bank  closed  its  doors 
and  the  trouble  became  general.  No  less  than 
fifteen  firms  on  the  Stock  Exchange  failed  during 
this  time. 

It  was  in  the  panic  of  1873  that  the  wonderful 
power  of  the  Clearing-House  as  exercised  in  the 
issue  of  loan  certificates  was  made  manifest.  This 
power  had  already  been  appreciated  as  one  of  the 
moving  causes  which  had  permitted  Wall  Street  to 
respond  so  readily  to  the  government's  demands  for 


large  loans  during  the  war,  but  its  influence  as  a 
factor  in  easing  a  tense  market  and  relieving  the 
strain  of  panicky  times  was  first  learned  in  1873, 
when  certificates  aggregating  $26,565,000  were 
issued.  Its  second  great  manifestation  was  in  1884, 
and  its  latest  in  1893,  which,  following,  as  we  have, 
the  course  of  financial  crises  since  1795,  brings  us 
to  the  present  time.  This  panic,  from  the  effects 
of  which  we  are  but  now  slowly  recovering,  had  its 
origin  in  many  causes.  Some  solvent  institutions 
were  forced  to  the  wall  through  a  general  distrust 
which  compelled  them  to  realize  on  good  security 
at  a  time  when  the  market  would  not  buy.  In  look- 
ing for  the  causes  of  this  distrust  many  things  must 
be  considered.  Tariff  changes  long  impending  pro- 
voked a  general  feeling  of  uncertainty  detrimental 
to  our  commercial  interests.  The  Silver  Purchase 
Law  caused,  in  addition,  distrust  of  our  currency 
both  at  home  and  abroad,  causing  the  foreigner, 
for  that  reason,  added  to  his  needs  on  account  of 
failures  in  South  America,  Australia,  and  Africa,  to 
send  back  our  securities  for  sale,  which  caused  large 
shipments  of  gold  out  of  the  country.  The  Inter- 
state Commerce  Law  and  the  State  Railroad  Com- 
mission laws  decreased  the  earnings  of  railroads. 
The  Reading  Railroad  receivership,  which  occurred 
early  in  the  year,  was  followed  by  others ;  the  failure 
of  the  Cordage  Company  in  April;  the  failure  of 
Western  farm  mortgage  companies,  caused  by  the 
inability  of  farmers  to  pay  interest  and  principal  of 
their  mortgage  loans ;  the  failure  of  banks,  caused 
by  an  unusual  demand  for  deposits ;  the  hoarding  of 
currency  withdrawn  from  banks,  so  that  the  premium 
on  it  went  up  to  five  per  cent.,  were  all  causes  tend- 
ing to  the  general  disaster. 

The  issuance  of  Clearing-House  certificates  to 
the  amount  of  nearly  $50,000,000  followed,  which 
tended  to  strengthen  public  confidence,  or  prevent  it 
from  being  wholly  destroyed.  All  this  happened  be- 
fore the  people's  attention  was  directed  to  the  mod- 
ification of  the  tariff  which  the  election  of  the  new 
administration  and  House  of  Representatives  indi- 
cated. At  and  before  the  assembling  of  the  new  Con- 
gress in  December  public  attention  was  attracted  to 
the  tariff,  and  this  added  to  the  distress;  and  to- 
gether with  continued  failures  of  corporations,  in- 
dividuals, and  railroads,  the  year  1893  closed  in  the 
midst  of  gloom.  The  last  week,  when  the  Atchison 
and  New  England  railroads  went  into  the  receivers' 
hands,  was  the  bluest  week  the  country  experienced 
in  its  history,  unless  the  blue  week  in  July  may  be 
the  exception. 

Since  then  Wall  Street  and  the  government,  or 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


rather  the  treasury,  have  been  in  more  intimate 
relation  than  at  any  other  time  since  the  Civil  War. 
The  real  necessity  for  this  close  connection  is  found, 
perhaps,  in  those  principles  of  national  finance  which 
leave  an  unprotected  treasury  to  bear  the  brunt  of 
attacks  which  it  is  powerless  to  avert.  In  this  posi- 
tion no  more  logical  ally  than  Wall  Street  could  be 
found,  despite  the  clamor  of  the  uninformed ;  and 
in  the  work  of  the  recent  Bond  Syndicate,  headed 
by  J.  Pierpont  Morgan,  has  been  given  a  demonstra- 
tion of  certain  important  economic  and  financial 
principles  never  before  correctly  estimated.  In  the 
preliminary  steps  leading  up  to  the  formation  of 
the  Bond  Syndicate  of  1895  was  demonstrated  the 
helplessness  of  the  treasury,  unaided,  to  control  our 
national  finances.  A  depleted  gold  reserve  in  the 
first  month  of  1894  was  met  by  an  issue  in  February 
of  $50,000,000  of  bonds  bearing  five  per  cent,  inter- 
est, which  sold  at  a  sufficient  premium  to  yield 
$58,661,000  in  gold  to  replenish  the  waning  trea- 
sury reserve. 

The  tide  of  exchange,  always  flowing  outward  in 
the  spring  and  summer,  speedily  lowered  again  the 
gold  reserve.  From  $106,527,068  in  February,  the 
reserve  had  fallen  to  $52,189,500  early  in  August. 
The  movement  of  the  crops  turned  the  tide  at 
this  juncture,  but  by  October  the  reserve  was  only 
$61,361,826,  or  far  below  its  traditional  limit  of 
$100,000,000  ;  so  a  second  bond  issue  was  made  in 
November.  $58,538,500  was  netted  by  this  sale, 
and  the  gold  reserve  stood  at  $105,424,569.  Then 
came  the  most  significant  and  disquieting  event  in 
all  our  financial  history.  At  a  season  of  the  year 
when  large  exports  of  gold  were  scarcely  to  be  ex- 
pected there  came  a  drain  upon  the  treasury  such 
as  had  never  before  been  known.  Distrust  and 
rising  excitement  were  visible  everywhere  ;  less  than 
half  the  gold  withdrawn  was  for  export,  the  remain- 
der was  hoarded.  In  less  than  two  months  the  gold 
reserve  fell  to  $44,705,967,  and  drastic  measures 
were  required.  It  was  evident  that  while  the  trea- 
sury might  continue  selling  bonds,  it  could  not  hold 
the  gold  in  reserve  in  the  face  of  the  prevailing  rates 
of  exchange  and  the  wide-spread  distrust.  Not  only 
was  action  required  that  would  inspire  immediate 
confidence,  but  it  must  be  also  such  as  to  sustain 
that  confidence  by  regulating  foreign  exchange. 

This  was  the  problem  before  the  treasury  in  Feb- 
ruary, 1895,  and  the  Bond  Syndicate,  which  came 
forward  to  undertake  the  novel  task,  had  far  more 
to  overcome  than  was  generally  recognized.  For 
this  syndicate  to  supply  the  treasury  with  gold  was, 
comparatively  speaking,  a  simple  matter;  but  for 


them  to  so  protect  this  reserve  that  it  should  not  be 
drained  away  as  the  proceeds  of  the  previous  bond 
sales  had  been  was  a  different  matter.  Nevertheless 
this  the  syndicate  undertook  to  do,  and  a  contract 
was  entered  into  whereby  the  treasury  bought  from 
them,  by  an  issue  of  $62,317,500  in  "  coin  "  bonds, 
3,500,000  ounces  of  gold,  making  the  amount  paid 
by  the  syndicate  for  the  bonds  $65, 117, 500.  From 
February,  when  the  agreement  was  entered  into, 
until  the  last  week  in  June,  when  the  final  payment 
into  the  treasury  was  made  and  the  connection  of 
the  Bond  Syndicate  with  the  government  terminated, 
this  association  kept  the  gold  reserve  above  suspi- 
cion, and  their  final  payment  left  the  treasury  with 
$107,512,362.  How  well  they  performed  their 
contract  is  shown  in  the  fact  that  during  April,  May, 
and  June,  when  heavy  gold  shipments  are  always 
made,  they  so  regulated  exchange  that  instead  of 
losing  $45,000,000  of  its  reserve,  as  the  treasury  had 
done  during  the  same  three  months  of  the  preceding 
year,  it  actually  increased  it  by  $7,242,963.  The 
method  of  the  syndicate  was  to  meet  the  local  needs 
for  exchange  and  to  sell  American  securities  abroad 
in  sufficient  amounts  to  offset  this  exchange.  This 
it  accomplished  from  February  until  the  end  of  July. 
By  that  time  the  movement  of  the  crops  should  have 
been  sufficient  to  influence  exchange  in  our  favor, 
but  a  delay  of  some  three  weeks  in  their  shipment 
caused  a  brief  fall.  Nevertheless  the  power  of  the 
Bond  Syndicate  had  been  shown.  It  had  done  all 
it  had  contracted  to  do,  and  revived  the  public  con- 
fidence at  a  time  when  it  sadly  drooped.  It  took 
great  risks,  accomplished  great  good,  and  showed 
again  how  far-reaching  is  the  influence  of  Wall 
Street.  That  the  reserve  of  the  treasury  cannot  re- 
main where  it  placed  it  is  no  fault  of  the  syndicate's. 
The  root  of  this  evil  lies  far  deeper — in  the  fallacies 
of  national  finance;  and  the  problem  it  presents 
must  some  day  be  met  and  solved. 

Without  entering  into  any  exhaustive  argument  of 
a  subject  so  vast  as  this,  it  may  be  said  that  at  the 
very  base  of  the  trouble  are  the  greenback  or  legal- 
tender  and  United  States  treasury  notes.  While  the 
aggregate  of  these  is  only  about  $500,000,000,  their 
actual  volume  is  unlimited,  for  the  reason  that  they 
are  redeemed  only  to  be  reissued.  Like  an  endless 
chain,  these  notes  running  in  and  out  of  the  treasury 
drain  in  a  steady  stream  the  nation's  gold,  of  which 
by  far  the  greater  part  goes  to  foreign  countries, 
while  our  government,  confronted  with  the  task  of 
paying  out  gold  to  redeem  notes  it  may  not  cancel, 
has  to  borrow  that  its  reserves  and  credit  may  be 
maintained.  The  nation  is  in  the  position  where  it 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


75 


has  to  give  gold  to  all  comers,  but  may  not  demand 
it  for  itself,  except  in  the  duties  of  the  custom- 
houses. It  is  a  fallacy  which  has  already  caused 
great  loss  to  our  people,  and  unless  speedy  action 
be  taken  will  cause  still  more.  It  demands  that 
the  treasury  exercise  banking  functions  that  it  was 
never  meant  to  have ;  and  until  these  so-called 
legal  tenders  are  retired  it  is  hard  to  see  how  the 
finances  of  this  country  can  be  either  satisfactory 
or  sound. 

If  Wall  Street  was  the  sole  reliance  for  supplies  of 
gold  when  it  was  required  for  export,  it  could  pro- 
tect itself  from  too  great  a  drain  by  raising  the  rate 
of  discount,  which  would  check  imports  and  stimu- 
late exports,  thus  giving  the  danger-signal  to  the 
commercial  classes,  who  are  directly  responsible  for 
the  error  of  over-trading.  The  United  States  Trea- 
sury, which  does  not  discount  commercial  paper, 
but  has  obligations  outstanding  in  the  form  of  legal 
tender  or  treasury  notes  redeemable  on  demand,  has 
no  means  of  protecting  its  reserve,  which  must  be 
paid  as  long  as  the  demand  for  it  continues  or  until 
its  stock  of  the  metal  is  exhausted. 

The  work  of  the  Bond  Syndicate  closes  the  chap- 


ter of  memorable  events  by  which  Wall  Street  has 
risen  to  its  present  importance.  A  century  ago 
Lombard  Street  was  the  center  of  the  world's 
moneyed  interests ;  Wall  Street  hardly  had  an  exis- 
tence. To-day  it  rivals  the  former  in  many  respects. 
The  Paris  Bourse  and  the  great  centers  of  Berlin 
and  Vienna  are  as  intimately  connected  with  Wall 
Street  as  with  one  another.  A  flurry  in  one  center 
reflects  itself  within  the  hour  in  all  the  others.  The 
Old  World  is  coming  to  regard  American  securities 
as  the  best  and  safest  outlet  for  her  investors.  At 
the  present  time  Wall  Street  most  certainly  is  the 
channel  leading  to  the  richest  and  most  profitable 
fields  of  enterprise  in  the  world.  The  railroads, 
commerce,  mines,  and  industries  of  our  continent 
serve  as  her  sources  of  supply,  and  in  their 
development  has  been  and  will  be  still  greater 
wealth. 

If  in  tracing  this  sketch  of  Wall  Street  I  may  have 
seemed  to  infringe  in  some  degree  upon  the  domain 
of  national  finance,  it  must  be  remembered  that  the 
two  are  indissolubly  linked  together,  and  in  the  in- 
tegrity of  both  lies  the  great  safeguard  of  our  coun- 
try's prosperity. 


CHAPTER    XIII 

ADVERTISING   IN   AMERICA 


THE  development— yes,  even  the  continued 
existence — of  every  industry  described  in 
this  work  depends  on  the  dissemination  of  in- 
formation concerning  it,  and  the  resulting  knowledge 
of  what  it  is  and  what  it  is  doing.  Such  dissemina- 
tion of  information  is  advertising. 

It  may  take  myriad  forms, — traveling  representa- 
tives ;  exhibits  at  fairs,  by  window  displays,  or  in 
the  stores  of  the  retailers ;  distribution  of  samples ; 
circulation  of  catalogues,  circulars,  or  other  printed 
and  lithographed  matter;  advertisements  in  news- 
papers ;  signs,  stationary  and  movable ;  use  of 
"novelties," — but  whatever  it  is,  it  is  all  advertising, 
and,  for  want  of  a  better  term,  may  be  defined  as 
"an  effort  to  cause  others  to  know,"  and  which  it 
is  hoped  will  also  cause  them  to  remember  and  do. 

Emerson  says  we  should  read  history  actively 
rather  than  passively ;  that  is,  we  should  treat  it  as 
a  commentary  on  our  own  lives.  While  much  his- 
tory has  in  it  nothing  in  common  with  our  surround- 
ings or  purposes,  and  cannot,  therefore,  yield  us 
anything  of  direct  value,  the  history  of  advertising, 
being  a  record  of  the  adaptation  of  business  methods 
to  modern  business  conditions,  is  peculiarly  rich  in 
helpful  information,  and  a  careful  study  of  it  in  the 
manner  Emerson  suggests  should  greatly  benefit  the 
modern  business  man. 

The  advertising  of  the  pre-printing  period  had,  of 
course,  to  be  adapted  to  the  conditions  of  that  age ; 
the  crier,  the  carved  sign,  the  crude  poster,  were 
then  the  best  means  of  conveying  information  to  the 
public.  Even  after  the  advent  of  the  printing-press 
and  the  newspaper  the  development  of  advertising 
necessarily  awaited  the  general  education  of  the 
masses.  Book  and  paper  were  alike  valueless  to 
those  who  could  not  read.  How  slowly  conditions 
changed  may  be  gathered  from  the  fact  that  the 
Boston  "  News-Letter,"  the  first  paper  in  the  country 
to  maintain  publication,  had  only  300  subscribers 
in  1744— forty  years  after  its  establishment. 


76 


A  century's  history  of  advertising  in  the  United 
States  is  a  story  of  wonderful  development ;  but  so 
marvelous  has  been  its  growth  during  the  last  fifty 
years  that  the  record  of  the  other  fifty  now  seems 
scarcely  more  than  one  of  mere  existence.  Ameri- 
can advertising  has  advanced  along  many  lines, 
concerning  each  of  which  much  of  interest  might  be 
written. 

Inasmuch  as  it  has  been  estimated  that  more  than 
seventy-five  per  cent,  of  the  amount  expended  for 
American  advertising  is  now  paid  to  the  newspapers, 
— in  which  term  are  included  the  magazine,  the 
trade  journal,  and  all  other  publications  of  the  class 
known  as  periodicals, — we  will  speak  first  of  news- 
paper advertising. 

The  wider  use  which  it  has  attained  over  all  other 
methods  is  not  to  be  accounted  for  on  the  ground 
that  newspaper  advertising  is  a  fashion  or  a  fad. 
Its  wonderful  use  to-day,  and  the  still  more  wonder- 
ful future  which  awaits  it,  have  for  their  enduring 
foundation  the  fact  that  newspaper  advertising 
appeals  to  human  intelligence  by  the  great  method 
through  which  information  will  for  all  time  be  com- 
municated— the  printed  page.  The  plain  millions 
of  America  are  an  ever-reading,  ever-wanting,  ever- 
buying  people,  and  the  business  man  who  realizes 
all  three  of  these  facts  can  but  recognize  the  reason- 
ableness of  newspaper  advertising  as  a  means  of 
telling  others  what  he  has  and  what  he  is  doing. 

Newspaper  advertising  could  not,  of  course,  exist 
apart  from  the  newspaper  press.  So  closely  are 
they  related,  that  the  growth  of  the  former  cannot 
be  adequately  set  forth  without  some  reference  to 
the  latter.  This  accounts  for  the  appearance  here 
of  a  few  newspaper  statistics,  which  may  be  found 
in  more  complete  form  in  the  able  article  on  news- 
papers elsewhere  in  this  work. 

In  1795,  at  the  beginning  of  the  period  covered 
by  this  work,  there  were  in  this  country  about  200 
newspapers.  In  1810  there  were  366  ;  in  1820,  700 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


77 


(estimated);  in  1830,1000  (estimated);  in  1840,  press.  Comparative  statistics  of  this  character  have 
1403;  in  1850,  2526;  in  1860,  3343;  in  1870,  been  gathered  only  three  times.  The  first  effort 
5871 ;  in  1880,  11,314;  in  1890,  17,712;  in  1895,  was  in  1828,  when  the  number  of  newspapers  and 


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20,217.     Dividing  the  century  equally,  the  growth  periodicals  in  the  world  was  3168,  of  which  800 

in  each  half  is  about  1000  per  cent.  (twenty-five  per  cent.)  were  published  in  America; 

It  will  be  interesting  at  this  point  to  consider  the  in  1866  the  total  number  was  estimated  at  12,500, 

position  which  the  United  States  occupies  in  relation  and   of  these  America  claimed   5000 ;    the  count 

to  the  rest  of  the  world  in  the  extent  of  its  newspaper  made  in  1882  showed  a  total  of  25,766,  of  which 


78 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


11,000  were  published  in  the  United  States;  at  the 
present  time  the  whole  number  is  probably  in  the 
neighborhood  of  40,000,  of  which  more  than  one 
half  are  published  in  this  country. 

The  first  daily  in  the  United  States  was  the 
"American  Daily  Advertiser,"  of  Philadelphia, 
established  in  1784,  of  which  the  "North  Ameri- 
can "  of  that  city  is  the  direct  lineal  descendant. 
The  following  year  the  "  Daily  Advertiser,"  New 
York,  was  started.  We  reproduce  on  preceding  page 
the  first  page  of  this  paper,  date  of  March  7,  1795. 
To-day  we  have  upward  of  2000  dailies. 

The  first  newspaper  advertisement  in  America 
appeared  in  the  Boston  "  News-Letter,"  established 
in  1 704,  a  two-page  paper,  printed  on  a  sheet  eight 
inches  by  twelve,  two  columns  to  the  page.  It  had 
but  one  advertisement,  which  read  as  follows : 

"This  NEWS-LETTER  is  to  be  continued 
Weekly,  and  all  persons  who  have  any  Houses, 
Lands,  Tenements,  Farms,  Ships,  Vessels,  Goods, 
Wares  or  Merchandizes,  &c.,  to  be  Sold  or  Let ;  or 
Servants  Runaway,  or  Goods,  Stole  or  Lost;  may 
have  the  same  inserted  at  a  Reasonable  Rate  from 
TWELVE  PENCE  TO  FIVE  SHILLINGS 
AND  NOT  EXCEED.  Who  may  agree  with 
John  Campbell,  Postmaster  of  Boston.  All  Persons 
in  Town  and  County  may  have  said  NEWS-LET- 
TER every  Week,  Yearly,  upon  reasonable  terms, 
agreeing  with  John  Campbell,  Postmaster  for  the 
same." 

The  earliest  recorded  instance  of  the  publication 
of  any  number  of  advertisements  was  in  the  "  New 
England  Weekly  Journal,"  of  Boston,  established  in 
1728,  a  two-page  sheet,  seven  inches  by  thirteen. 
The  news  in  this  paper  was  all  foreign,  and  from 
three  to  four  months  old.  The  advertisements  were 
of  books,  coffee  importations,  runaway  slaves,  sales 
of  negro  girls,  and  a  notice  of  a  school  for  negroes. 
Beyond  this  there  was  nothing  but  obituaries  and 
the  sailing  and  arrival  of  vessels.  But  notwithstand- 
ing these  early  instances  of  the  use  of  advertisements, 
American  advertising  cannot  be  said  to  have  begun 
before  1788,  and  then  only  in  a  very  humble  way, 
the  advertisements  being  confined  almost  entirely 
to  the  classes  just  enumerated.  These  conditions 
continued  until  about  1820,  when  greater  promi- 
nence began  to  be  given  to  news.  Hitherto  the 
columns  not  devoted  to  advertising  had  been  largely 
filled  with  elaborate  treatises  on  party  principles  and 
politics,  and  articles  on  literary  and  scientific  sub- 
jects; but  as  the  news  columns  became  fuller  and 
more  interesting,  the  number  of  subscribers  and 
readers  increased,  and  the  growth  of  the  advertising 


patronage  kept  pace  with  both.  The  rapid  increase 
of  newspaper  advertising  may,  however,  be  said  to 
date  from  the  establishment  of  the  "Sun,"  New 
York,  in  1833  ;  the  "  Herald,"  New  York,  in  1835  ; 
the  "Public  Ledger,"  Philadelphia,  in  1836;  and 
the  "Tribune,"  New  York,  in  1841. 

Leading  metropolitan  papers  of  to-day  carry  dur- 
ing the  week  from  fifteen  to  forty  columns  of  adver- 
tisements, while  their  big  Sunday  editions  frequently 
have  over  100  columns  each.  In  a  recent  exami- 
nation of  an  ordinary  week-day  issue  of  ten  leading 
dailies  selected  from  different  sections  of  the  country, 
the  space  occupied  by  advertisements  ranged  from 
twenty-five  per  cent,  to  seventy  per  cent.,  the  aver- 
age of  the  ten  being  forty  per  cent. 

In  the  beginning  of  the  century  advertising  was 
almost  exclusively  local ;  but  to-day  newspaper  ad- 
vertising divides  itself,  naturally  and  perhaps  quite 
equally,  into  two  classes — local  and  general.  Local 
advertising  portrays  the  activities  of  the  locality. 
These  find  expression  in  the  myriad  "want"  ad- 
vertisements and  other  classified  announcements, 
for  the  gathering  of  which  numerous  branch  offices 
are  maintained,  and  the  services  of  local  and  district 
telegraph  companies  employed ;  and  as  well  in  the 
large  daily  announcements  of  the  leading  retailers, 
from  some  of  whom  single  papers  are  said  to  receive 
an  annual  income  approximating  $50,000. 

General  advertising,  on  the  other  hand,  voices  the 
enterprise  of  the  business  man  anywhere  who  be- 
lieves he  has  that  which  is  really  wanted  otherwhere. 
By  such  advertising,  and  with  moderate  outlay, 
almost  numberless  articles,  otherwise  little  known, 
have  been  brought  into  general  use  throughout  the 
country,  and  in  like  manner  some  of  the  most 
remarkable  commercial  successes  of  the  century 
have  been  achieved.  General  advertising  ranges 
from  the  advertisement  of  the  dealer,  who  seeks  to 
make  direct  sales  to  the  consumer,  to  that  of  the 
manufacturer  who  annually  expends  from  $500,000 
to  $750,000  to  acquaint  people  with  the  name  and 
merits  of  an  article  which  can  be  procured  only 
through  the  retailer.  It  has  grown  of  late  years  to 
such  dimensions  that  many  papers  find  it  profitable 
to  employ  one  or  more  representatives  whose  only 
duty  is  to  present  the  claims  of  the  publication  to 
advertisers. 

Just  as  the  marvelous  strides  by  which  American 
journalism  has  outstripped  the  journalism  of  all  the 
rest  of  the  world  could  never  have  been  possible 
except  for  the  marvelous  patronage  of  American 
advertisers,  so  there  would  never  have  been  such 
wonderful  growth  in  advertising  except  for  the  men 


ONE   HUNDRED   YEARS  OK  AMERICAN   COMMERCE 


n 


whose  ability  and  energy  have  been  entirely  and 
untiringly  devoted  to  the  promotion  of  newspaper 
advertising.  From  the  small  beginning  of  special 
representation  of  a  few  papers,  there  has  grown  the 
advertising  agency  system  of  to-day,  which  well 
deserves  recognition  among  American  industries. 
There  are  probably  more  than  fifty  concerns  in  the 
United  States  trading  as  newspaper  advertising 
agents,  and  to  at  least  thirty  of  them  the  leading 
mercantile  agencies  accord  recognition  and  commer- 
cial rating.  The  aggregate  of  capital  invested  runs 
into  the  millions,  and  one  or  more  representatives 
of  the  industry  are  to  be  found  in  every  prominent 
newspaper  center. 

The  first  beginning  in  this  line  was  made  in 
Philadelphia,  in  1840,  by  Volney  B.  Palmer,  who 
afterward  established  branches  in  New  York  and 
Boston.  The  S.  R.  Niles  Agency  was  an  outgrowth 
of  the  Boston  branch,  and,  with  a  record  of  honor- 
able dealing  through  all  these  years,  still  continues 
business.  Mr.  W.  W.  Sharpe,  of  New  York,  com- 
menced as  a  boy  in  Mr.  Palmer's  employ,  and 
to-day  does  business  under  the  style  of  W.  W. 
Sharpe  &  Company.  Mr.  S.  M.  Pettingill,  of  New 
York,  was  also  employed  by  Mr.  Palmer,  and  with 
Mr.  Bates  carried  on  the  business  there  established. 
The  Bates  &  Morse  Advertising  Agency  was  their 
legitimate  successor,  and  this  business  is  now  con- 
tinued by  the  Lyman  D.  Morse  Agency.  The 
business  at  Philadelphia  was  likewise  carried  on 
continuously  and  with  constant  growth,  until  in 
1878  it  was  absorbed,  by  purchase,  into  the  business 
of  N.  W.  Ayer  &  Son,  who  are  to-day  recognized 
leaders  in  this  line.  Some  idea  of  the  magnitude  of 
their  business  can  be  gathered  from  the  fact  that 
their  outlay  for  clerical  help  during  1895  will  fall 
little,  if  any,  below  $100,000. 

As  in  the  enormous  growth  of  the  advertising  in- 
terest the  advertising  agency  became  an  important 
factor  as  well  as  a  necessary  result,  so  the  newspaper 
guide  or  directory  was  a  necessity  to,  as  well  as  an 
outgrowth  of,  the  exigencies  of  the  agency.  At  the 
first  the  agencies  guarded  with  jealous  care  their 
lists  of  the  papers  of  the  country,  but  the  rapid 
multiplication  of  papers  soon  necessitated  printed 
lists ;  and  as  the  preparation  of  these  lists  necessi- 
tated the  expenditure  of  large  sums  of  money,  the 
agents  finally  concluded  to  give  them  to  the  public, 
and  solicit  advertisements  from  the  newspaper  pub- 
lishers to  help  pay  their  cost. 

The  first  attempt  was  the  "  Newspaper  Record," 
containing  lists  of  newspapers  and  periodicals  in  the 
United  States,  Canada,  and  Great  Britain,  by  Lay 


&  Brother,  Philadelphia,  in  1856.  The  first  per- 
manent publication  of  this  character,  however,  the 
"  American  Newspaper  Directory,"  was  started  in 
New  York,  in  1869,  by  George  P.  Rowell  &  Com- 
pany, newspaper  advertising  agents,  who  have  con- 
tinued the  publication  regularly  to  this  date.  In 
1880,  N.  W.  Ayer  &  Son,  of  Philadelphia,  began  the 
publication  of  the  "  American  Newspaper  Annual," 
which  has  been  regularly  issued  since.  In  addition 
to  these  two  directories,  Pettingill  &  Company,  of 
Boston,  publish  a  very  commendable  handbook, 
while  Dauchy  &  Company  and  J.  Walter  Thomp- 
son, of  New  York,  and  Lord  &  Thomas,  of  Chicago, 
all  widely  known  advertising  agents,  with  some 
others  of  lesser  repute,  publish  manuals,  more  or  less 
pretentious,  varying  in  contents  and  make-up  accord- 
ing to  the  publisher's  conception  of  the  needs  of  the 
advertiser. 

Perhaps  no  better  general  idea  can  be  obtained 
of  the  great  extent  of  the  newspaper  press  of  the 
United  States,  and  of  the  vastness  of  its  advertising 
patronage,  than  by  an  examination  and  study  of  the 
most  complete  of  these  publications.  It  is  almost 
impossible  for  one  not  familiar  with  the  book  to 
appreciate  the  amount  of  labor  and  expense  which 
its  annual  revision  involves.  Hourly  changes  are 
going  on  in  all  parts  of  the  country:  changes  of 
location,  changes  in  editors,  changes  in  size,  price, 
or  day  of  publication ;  consolidations ;  removals ; 
suspensions.  When  it  is  known  that  about  4000 
publications  are  started  annually,  and  that,  owing 
to  suspensions  and  consolidations,  the  net  annual 
increase  in  seasons  of  business  prosperity  ranges 
from  750  to  1000,  even  the  uninitiated  can  appreci- 
ate in  some  degree  the  immensity  of  the  undertaking, 
and  the  greatness  of  the  industry  that  renders  the 
publication  of  such  books  not  only  advisable,  but 
absolutely  necessary.  The  newspaper  directory  is 
as  essential  to  the  general  advertiser  as  are  the 
reports  of  the  great  mercantile  agencies  to  the  busi- 
ness man. 

An  important  factor  in  the  spread  of  advertising 
has  been  the  cooperative  newspaper,  known  to 
printers  and  advertisers  as  "  patent  insides "  or 
"  patent  outsides  " — a  system  which  has  had  all  its 
growth  within  the  last  twenty-five  years.  Under 
this  system  half-printed  sheets  are  supplied  to  the 
offices  from  which,  after  the  printing  of  the  other 
half,  the  papers  are  issued.  The  cost  of  type-setting 
is  reduced  to  a  minimum,  because  the  reading  mat- 
ter, with  slight  variations,  is  the  same  in  all  papers 
issued  from  any  one  house.  This  and  the  wholesale 
purchase  of  paper,  together  with  the  income  from 


80 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


the  advertising,  make  it  possible  to  supply  the  half- 
printed  sheets  at  a  price  scarcely  more  than  the 
ordinary  cost  of  white  paper.  It  is  readily  apparent 
that  this  whole  system  is  contingent  upon  newspaper 
advertising.  Except  for  the  income  from  the  ad- 
vertising, the  system  could  not  exist.  Except  for 
the  system,  hundreds  of  small  places  over  the  coun- 
try could  not  sustain  the  local  papers  which  they 
now  issue.  There  are  at  present  nearly  8000  such 
papers  published, — more  than  one  third  of  the  entire 
number  of  the  newspaper  press  of  the  country, — and 
consequently  a  large  amount  of  money  is  annually 
expended  for  advertising  in  them. 

Magazine  advertising  is  only  about  twenty-five 
years  old.  Although  there  were  successful  maga- 
zines before  that  time,  they  did  not  admit  advertise- 
ments. It  was  with  the  appearance  of  the  "  Cen- 
tury "  (then  called  "Scribner's  Monthly"),  in  1870, 
that  the  new  order  of  things  came  in.  Its  first 
number  contained  advertisements,  which  have  stead- 
ily increased  in  quantity,  until  its  issue  of  December, 
1894,  contained  134  pages  of  them.  In  1882,  after 
thirty-two  successful  years  without  them,  Messrs. 
Harper  &  Brothers  yielded  to  the  inevitable  and 
began  the  insertion  of  advertisements  in  their  "  New 
Monthly  Magazine."  Here,  too,  the  increase  in 
quantity  was  rapid,  reaching  144  pages  in  the  num- 
ber of  December,  1894.  At  the  page  rate  of  $250 
the  advertising  income  of  such  an  issue  would  be 
$36,000.  Putting  the  average  amount  of  advertis- 
ing the  year  through  at  92  pages  per  month,  the  ad- 
vertising receipts  of  this  one  magazine  for  one  year 
would  reach  $276,000.  It  is  estimated  that  the 
December,  1894,  issues  of  six  leading  monthly  mag- 
azines represented  an  advertising  investment  of 
more  than  $180,000.  There  are,  of  course,  a  great 
many  other  excellent  publications  of  this  class  which 
cannot  here  be  mentioned,  but  which  are  widely 
recognized  as  advertising  mediums  of  great  value. 

It  is  said  that  Mr.  Gladstone  prefers  the  American 
to  the  English  edition  of  such  of  our  magazines  as 
print  both,  for  the  reason  that  the  advertisements  in 
the  American  editions  are  so  interesting,  and  set 
forth  so  clearly  the  enterprise  and  progress  of  our 
country.  Thousands  of  people  have  made  the  same 
discovery  as  the  great  English  statesman  and  stu- 
dent of  human  affairs.  The  truth  is  that  the  public 
has  to-day  a  great  and  growing  interest  in  the  infor- 
mation which  we  call  advertising,  and  the  newspa- 
pers and  periodicals  themselves  would  feel  bound  to 
print  much  of  it  as  news,  did  they  not  print  it  in  the 
form  of  advertisements. 

The  trade  journal  is  an  interesting  illustration  of 


specialization.  Starting  with  the  papers  which  at. 
tempt  to  set  forth  the  condition  and  movement  of 
trade  in  general, — of  which  class  the  "  New  York 
Prices  Current "  (from  an  old  issue  of  which  we  re- 
produce a  page)  was  one  hundred  years  ago,  as  it 
is  to-day,  a  good  example, — it  has  followed  the 
branching  out  of  each  particular  industry,  keeping 
close  step  with  its  progress,  until  to-day  there  is 
scarcely  a  manufacturing  or  commercial  interest  but 
has  its  representative  journal,  and  often  several  of 
them,  whose  reading  and  advertising  columns  alike 
are  of  value  chiefly  to  its  own  special  class  of  readers. 

In  early  days  a  certain  amount  of  advertising 
went  with  each  subscription.  For  instance,  one 
hundred  years  ago  the  payment  by  a  merchant  of  a 
certain  sum  to  the  "  Shipping  List  "  as  a  subscription, 
carried  with  it  the  privilege  of  the  use  of  all  needed 
advertising  space  during  the  same  period.  That 
this  privilege  was  not  overworked  is  perhaps  as 
forceful  proof  as  can  be  given  that  the  value  of  such 
advertising  yet  lacked  recognition. 

That  space  itself  then  had  no  fixed  value  may  be 
seen  from  the  announcements  in  the  "  New  Jersey 
Journal,"  of  Elizabethtown,  on  January  16, 
1790,  that  "advertisements  of  A  MODERATE 
LENGTH  will  be  inserted  three  weeks  for  eight 
shillings,  and  two  shillings  for  each  insertion  after- 
ward." 

While  newspaper  space  to-day  very  often  sells  at 
a  fixed  rate,  the  fixing  of  that  rate  is  very  arbitrary. 
The  most  mentioned  factors  are  quantity  of  cir- 
culation, character  of  readers,  and  control  of  the 
field.  The  price  of  newspaper  space  has  advanced 
greatly  with  its  wider  use.  The  "Herald,"  New 
York,  and  "  Public  Ledger,"  Philadelphia,  having 
always  enjoyed  liberal  advertising  patronage,  are 
good  illustrations  of  this.  Established  in  1835  and 
1836  respectively,  they  both  at  first  charged  for 
advertising  fifty  cents  per  square  per  insertion.  The 
square  was  for  a  long  time  the  unit  of  measurement, 
and  fifty  cents  was  for  a  long  time  the  rate  per 
square ;  but  the  square  itself  gradually  shrank  in  size 
with  the  flying  years,  until  from  being  nineteen  agate 
lines  in  1836  in  the  "Ledger,"  in  1863  it  equaled 
only  four  agate  lines.  This,  of  course,  was  twelve 
and  one  half  cents  per  agate  line.  The  minimum 
price  soon  climbed  to  twenty  cents  in  the  "  Ledger  " 
and  forty-five  cents  in  the  "  Herald,"  at  which  it 
stands  to-day,  showing  an  increase  in  the  sixty  years 
of  750  and  1800  per  cent,  respectively. 

While  the  price  of  advertising  has  been  advancing, 
the  size  of  the  papers  has  been  increased  many 
times  also.  These  enlargements  have  in  almost 


FRANCIS  WAYI.AND  AVER. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


81 


every  case  been  made  necessary  by  the  encroach- 
ment of  the  advertising  upon  the  reading  columns. 
In  some  instances  the  paper  would  become  three 
fourths  advertising,  then  an  enlargement  would  fol- 
low which  would  relieve  the  condition  until  the 
ever-flowing,  ever-growing  stream  of  trade  again 
filled  its  columns.  The  average  daily  edition  of  the 


The,  New-York 


ffcbliflied  every  MONDAY  by  JAMES  ORAM, 


umns.  There  are,  even  now,  conspicuous  exceptions 
to  the  rule  above  stated.  A  number  of  the  most 
successful  publications  have  obtained  very  unusual 
circulation,  in  very  unusual  time,  by  means  of 
advertising  in  the  columns  of  their  contemporaries. 
A  notable  instance  is  the  "  Ladies'  Home  Journal," 
of  Philadelphia,  whose  750,000  circulation  has  been 


Prices  Current. 


3  Dill,  ptr  aim.} 


MONDAY,  JANUARY  9.  1797. 


No.  33,  Liberty  .ftreet,  near  Mr.  Ctnj  D***i. 


[No.  5J. 


CHAMBER  tf  COMMERCE. 
Memt&ly  Ctmmittet. 

TnffT?l!TLACT  BACHt, 
ROBIKT    BOWNI, 
CnAM,It  L.  'CXMMAN, 

NEH'.rOKK  PRICE  *f  STOCKS, 
MONDAY,  Jim.  9. 
U.S.  Bank  Stock,           11  p.  ct. 
New.  York,        -            ig 
6  per  Cent.        .           ifi/j 

COURSE  •/  EXCHAKCl. 

MoKDAY     fjnt.  9. 

Billi  on  London,    60  rfij'i  fght, 
5  per  cent,  under  par. 

On  AmftcrJam,  60  dayj  fight,  4,0 

DAVID  GftlM. 

Deferred,        -             i<y*9 

cents  per  guild,  at  Co  diy*  credit* 

WHOLESALE  PRICES,  .carefully  corrcfted— In  Dollirs  and  Cents. 


From      To                                               From    To                                              From    To 

ASHES*  **, 

ton. 

D.C 

190 

D.  C 

•9S 

Checfc,  Englifli,     . 

_^_ 

rt.  c. 

2; 

D.C 
3 

Floor,  Superfine,   - 

all 

D.C 

p.  c. 

Pearl, 

___ 

none. 

American, 



'! 

Common,     - 



10    i 

Allum,          * 
Almond),      -        % 

Cwt 
Ib. 

7  J" 

8 

22 

Chocolate,             • 
Cloves,          .     .    , 

^~ 

2 
I    2 

I  3 

Virginia  Flour., 
Middling,  . 



10 

6 

..„ 

Anchor*,      -        -. 



«. 

ib 

Coal.  Foreign, 

Clul 

IO 

10   50 

Cornell,      . 

LV 

2 

Arrack,        - 

Gal, 

none. 

Virginia, 



9 

9  5c 

Buikwheatj 

3  5 

BACON,      - 

Ib. 

la 

Cocoa,  Surinam, 

Cwt 

11 

22 

Rye, 

u. 

7 

Barley,  (Scotch)     - 



7 

1 

IJland, 



20 

Indian  meal, 

MI 

5  ^ 

r     -  -- 

Brim,   white, 

bufh. 

'  37 

Copper  In  DicetJ, 

b. 

29 

•"UTS,  Otter, 

skin 

i 

4 

Beef,  Cargo, 
Prinx, 

bbl. 

9  jo 
10  50 

10 
II 

Copperas 
Coffee,  for  export. 

Cwt 
b. 

2    31 

ao 

Z    JC 

3 

Fifher, 
Miok, 



a 

l 

Mcft, 
1!  randy,))  re.  id  proof 

Gal. 

1      ;c 

It 

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Cwt 
b. 

'3  75 

6 

IJ 

8 

Martin* 
Red  Fox,      *. 

— 

i 
15 

09 
1    :  j 

id  proof, 



5« 

Cotton,  Georgia, 



28 

CroG-Fox,    - 



5° 

3d  proof, 



66 

i  68 

Bahama, 

— 

JS 

Grey  Fox,    . 



7C 

4tS  proof, 



81 

i  87 

W.  I  (land, 



30 

WiWC.it,    . 

^^ 

j. 

K 

Spanish,  i  ft  proof. 



37 

«  44 

St  .  Domingo, 



3> 

37 

Lucifc  Cat,  - 



f 

3  'JO 

id  proof, 



5° 

Demarara. 

35 

37 

MiifkratV    .. 

._  — 

14 

3d  proof, 



59 

Surinam, 



4' 

Racoon, 



1 

4thpioof, 
BrizHmo,    - 

Ton. 

75 
75 

So 

Cayenne, 
DUCK,  American, 

Bolt 

37 

2    50 

41 

Bear,  North. 
Wolf, 



7S 

z 

4  JO 

Bread,  Pilot, 

Cwt 

9  5C 

10 

Ruffia,    .'- 



5 

8 

Beaver,  North. 

b. 

1    2 

2  f  o 

Middling/ 



7 

7  50 

Ravens,     - 



12 

2    JO 



ShiP,          , 
Crttken,   . 
Urin,   (flruck  mrjf. 

>U£! 

4  75 
75 
27 

81 

EngHm.No.l, 

Rnflia  Sheetings, 
FLAX-SEED,       - 

rard 
'iece 
Bulb 

34 
7 

2    JO 

7  jo 

SE'NEVA,Hol!an<i 
Calk, 

jrrtin, 

(Jail. 

6  i; 

i    iS 

... 

Brinutone,  Roll,     . 

-wt 

J 

Flax, 

Ib. 

1  1 

M 

Wheat,  North. 

R.if!, 

one. 

Butter,  for  export. 

Ib. 

14 

J  j 

61 

South 

i  87 

CANDLES,  dipt, 

lbv 

IJ 

•"uftic 

Ton. 

o 

2J 

Rye, 



i   11 

mould. 

'7 

Fi(h,  Cod,  dry,     - 



one. 

4. 

Sperm. 

— 

•53 

do.  pwLJed,  - 

.!•!. 

J 

5  5C 

Oats, 

.50 

tj 

•CafCa,            *         , 

•  — 

5« 

Salmon, 

9  5° 

0 

Corn,  North,  (new) 

Open, 

Cwor,  . 

Bou 
Ib. 

'  5' 

a  cd 

•t? 

do.  finoakf  d, 
Mackarcl      - 
Herrinct. 

Piece 
bbl. 

40 
9 

f 

45 
e'ac 

Sou:h.    (old) 
>unpowder,  Fngl. 

TT 

l   f 

6, 
j  , 

f 

fc 

"  Herald  "  and  the  "  Ledger  "  is  now  perhaps  eleven 
times  the  size  of  their  first  number,  with  the  adver- 
tising barometer  steadily  on  the  rise.  In  this  respect 
the  two  papers  named  are  not  exceptional,  but 
rather  good  examples  of  prosperous  journals  the 
country  through. 

The  development  of  newspaper  advertising  has 
been  so  rapid  that  many  newspapers  themselves 
have  not  yet  caught  up  with  it ;  that  is  to  say,  while 
they  all  freely  recommend  it  to  other  people  for  the 
improvement  of  their  business,  but  comparatively 
few  employ  it  for  the  development  of  their  own. 
This,  of  course,  refers  to  advertising  in  other  journals 
— not  to  the  exploiting  of  a  paper  in  its  own  col- 


largely  obtained  and  maintained  by  newspaper  ad- 
vertising. 

Some  attempts  have  lately  been  made  to  introduce 
color-work  into  the  display  of  newspaper  advertise- 
ments. This  has  generally  taken  the  form  of  covers 
for  special  editions  of  newspapers  and  periodicals. 
Quite  recently  a  large  newspaper  advertiser  has  been 
using  color  printing  on  colored  paper  for  inserts  in 
the  leading  magazines.  This  is  regarded  as  a  sig- 
nificant innovation.  The  wide  use  of  color  print- 
ing in  the  regular  issues  of  daily  papers,  however, 
awaits  the  overcoming  of  mechanical  and  financial 
obstacles. 

We  have  no  means  of  knowing  what  was  the 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


value  of  the  advertising  in  the  newspapers  of  1795, 
but  the  Tenth  United  States  Census  gives  the  value 
of  advertisements  in  the  American  press  in  1880  at 
$39,136,306,  and  the  next  census  shows  that  these 
figures  had  increased  in  1890  to  $71,243,361 — a 
gain  of  eighty-two  per  cent,  in  ten  years.  We  are 
justified  in  believing  that  the  value  to-day  is  con- 
siderably over  $100,000,000 — a  notable  result  of  a 
century  of  progress! 

Perhaps  nothing  has  done  more  to  develop  news- 
papers, and  therefore  newspaper  advertising,  than 
the  railroads,  whose  remarkable  story  is  told  else- 
where in  this  volume.  Perhaps,  also,  nothing  has 
done  more  to  develop  the  railroads  than  the  news- 
paper. Each  without  the  other  would  seem  to  be 
as  ineffective  as  a  half-pair  of  scissors ;  but  worked 
together  they  have  cut  the  restraining  cords  of  en- 
vironment and  made  possible  the  greatest  national 
and  individual  prosperity.  With  the  newspapers  to 
tell  of  affairs  and  trade,  and  the  railroads  to  carry 
persons  and  things,  in  spite  of  our  wide  territory,  we 
really  touch  elbows  with  one  another,  and  the  future 
greatness  of  our  commercial  interests  is  beyond  pre- 
diction. But  of  one  thing  we  may  feel  certain  :  "  the 
best  is  yet  to  be." 

When  the  business  man  of  an  earlier  time  put  an 
advertisement  in  the  newspapers,  what  he  inserted 
was  often  an  inventory  of  his  leading  articles — a 
sign,  so  to  speak,  showing  the  nature  of  the  business 
carried  on  at  the  address  indicated.  The  prepara- 
tion of  such  an  advertisement  required  no  special 
ability.  Then,  again,  he  generally  expected  what 
he  put  in  the  paper  to  stay  there  for  a  long  time. 
This  fact  also  contributed  to  make  his  newspaper 
advertising  of  very  little  trouble  to  him. 

But  a  change  of  ideas  of  what  an  advertisement 
should  be,  and  how  it  should  be  used,  brought  into 
existence  what  are  to-day  two  prominent  features 
of  advertising,  viz.,  the  advertisement  writer  and  the 
paper  devoted  to  advertising.  The  advertisement 
writer  is  an  outgrowth  of  very  recent  years.  The 
fierceness  of  competition  and  the  increasing  cost  of 
newspaper  space  have  made  attractive,  interesting, 
truthful,  and  convincing  advertisements  a  necessity. 
The  advertisement  writer  studies  to  supply  this  need. 
That  he  well  supplies  it  must  be  evident  to  any 
reader  of  to-day's  advertisements.  Many  an  adver- 
tisement now  represents  far  more  thought  than  has 
been  used  in  a  corresponding  space  in  any  other 
part  of  the  publication. 

The  good  advertisement  writer  must  of  necessity 
be  able  to  see  and  to  tell  very  clearly.  The  really 
capable  ones  are  in  demand,  and  receive  good  pay. 


Some  business  houses  employ  one  exclusively ; 
others  use  the  services  of  those  who  write  for  any 
one  on  order.  The  leading  advertising  agencies 
also  have  them  in  their  employ.  Their  work  is 
telling  for  the  better  on  American  advertising. 

Papers  devoted  exclusively  to  the  subject  of  ad- 
vertising have  appeared  in  the  last  ten  years.  There 
are  to-day  perhaps  a  dozen  of  these,  the  largest 
number  of  them  being  connected  more  or  less 
intimately  with  some  particular  advertising  agency. 
In  so  far  as  they  point  out  methods  of  proved  suc- 
cess, publish  unbiased  statements,  and  call  wider  at- 
tention to  the  common-sense  nature  of  newspaper 
advertising,  they  do  the  community  a  service;  but 
to  whatever  extent  they  air  the  foolishness  of  the 
"ad.  smith,"  with  his  "catchy"  and  "fortune- 
bringing  "  advertisement,  or  circulate  ill-informed  or 
ill-intended  criticism,  they  do  injury  to  the  greatest 
business-getting  method  of  modern  times.  We  be- 
lieve those  familiar  with  them  will  agree  that  these 
journals  are  as  a  class  growing  broader  in  their 
treatment  of  newspaper  advertising,  better  recogniz- 
ing its  seriousness  and  its  dignity.  They  certainly 
have  great  responsibility,  as  they  receive  very  care- 
ful reading  and  are  the  exponents  of  a  most  useful 
business  idea. 

The  trade  catalogue,  always  a  useful  business 
adjunct,  has  in  recent  years  been  transformed  into 
what  is  often  a  work  of  beauty  and  interest,  reflect- 
ing credit  on  all  concerned,  and  materially  increas- 
ing trade.  The  "descriptive  circular"  which  the 
advertiser  of  other  days  was  wont  to  offer  his  readers 
has  been  to  a  large  extent  superseded  by  the  busi- 
ness primer,  booklet,  or  brochure,  which  is  now  a 
distinct  feature  in  general  advertising.  It  grew  out 
of  recognition  of  the  fact  that  everything  cannot 
be  told  in  an  advertisement.  Perceiving  that  the 
prime  object  of  a  newspaper  advertisement  is  ac- 
complished when  the  reader  has  by  replying  to  it 
singled  himself  out  from  the  mass  of  mankind  and 
placed  himself  within  reach  of  correspondence  or 
representatives,  the  bright  advertiser  employs  these 
publications  to  give  details  and  to  further  or  com- 
plete sales.  To  their  preparation  the  best  writing, 
illustrating,  and  printing  skill  is  often  brought,  with 
the  result  that  their  value  in  advertising  has  now 
become  widely  recognized.  It  is  impossible  to 
estimate  closely  the  amount  annually  expended  in 
advertising  matter  of  this  class,  but  the  figures  are 
certainly  enormous. 

Reference  should  here  be  made  to  lithographic 
printing,  which  now  covers  an  annual  expenditure 
estimated  at  more  than  $15,000,000.  Most  of  this 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


output  is  intended  for  advertising  purposes.  Cards, 
folders,  hangers,  banners,  albums,  booklets,  and 
posters  are  produced  by  the  million.  The  work  as 
a  class  is  artistic  and  attractive,  while  competition 
and  ingenuity  have  greatly  cheapened  its  cost  and 
widened  its  use. 

The  use  of  posters  for  advertising  is  of  course 
very  old.  The  practice  has  not  only  grown  greatly, 
but  many  of  the  posters  themselves  have  of  recent 
date  possessed  great  artistic  merit.  The  poster,  as 
its  name  implies,  was  originally  an  announcement 
intended  to  be  posted  or  put  up  in  a  certain  place, 
and  it  was  therefore  for  a  long  time  confined  to  local 
use.  About  twenty-five  years  ago  it  transpired  that 
the  effectiveness  of  a  poster  was  often  increased  by 
its  being  placed  in  unusual  positions.  This  led  to 
sign  painting,  which  in  turn  has  become  a  recog- 
nized method  of  general  advertising.  To-day  the 
most  effective  and  ingenious  use  is  made  of  blank 
walls,  barns,  etc.,  for  acquainting  the  public  with 
various  articles.  The  employment  of  natural  scenery 
as  a  background  for  this  work  has  fallen  under 
public  disapprobation,  and  appears  to  be  going  into 
disuse. 

Another  development  of  this  outdoor  work  is  the 
erection  and  painting  of  large  bulletin-boards  along 
the  lines  of  railroads  and  great  travel.  These  are 
leased  by  the  year  to  advertisers.  Such  a  sign- 
board, thirty  feet  long  and  four  feet  high,  costs  the 
advertiser  $30  a  year.  Perhaps  $1,250,000  are 
spent  annually  in  all  kinds  of  out-of-door  painting, 
exclusive  of  the  bill  posting  above  referred  to. 


Street-car  advertising  may  be  said  to  be  a  devel- 
opment of  the  last  fifteen  years.  During  the  first 
half  of  this  period  it  received  practically  nothing  but 
local  patronage.  About  seven  years  ago  the  inven- 
tion of  the  now  everywhere  common  curved  car- 
rack,  because  of  the  uniformity  in  the  size  of  cards 
which  it  secures,  opened  the  method  to  the  use  of 
general  advertisers,  who  were  not  slow  to  avail 
themselves  of  it.  From  that  time  the  growth  has 
been  very  rapid,  until  to-day  there  are  perhaps  in 
this  country  15,000  street-cars  carrying  advertise- 
ments. At  $100  per  year  per  car  this  would  make 
the  annual  advertising  expenditure  $1,500,000. 

Enterprise  is  ever  seeking  expression.  Advertis- 
ing has  always  been  the  expression  of  enterprise. 
The  few  meager,  colorless  announcements  of  1795, 
written  with  a  dull  and  heavy  pen,  fittingly  expressed 
the  enterprise  of  that  day.  At  the  close  of  a  cen- 
tury of  marvelous  progress  the  enterprise  of  to-day 
finds  expression  in  advertising  of  every  conceivable 
form,  in  every  available  place,  in  the  preparation 
and  illustration  of  which  have  been  combined  the 
best  obtainable  skill  of  hand  and  brain. 

Great  as  has  been  the  evolution  of  a  hundred  in- 
dustries in  a  hundred  years,  wonderful  as  has  been 
the  advance  in  the  arts  and  sciences,  the  printing- 
press  has  always  led  the  way,  and  is  to-day  the 
herald  and  helper  of  them  all.  Its  usefulness  will 
still  further  increase  with  the  discharge  of  its  duty, 
which  will  be  to  tell  the  story  of  the  better  things 
which  the  opening  century  will  unfold  to  the  better- 
seeking  millions  of  America. 


CHAPTER    XIV 

FIRE   AND   MARINE   INSURANCE 


AERICAN  fire  and  marine  insurance  business 
had  its  birth  at  about  the  close  of  the  eigh- 
teenth century.  Both  kept  in  the  forefront 
of  American  affairs  for  many  years,  but  marine  insur- 
ance suffered  heavily  when  the  American  flag  began 
to  disappear  from  the  high  seas.  For  the  past 
quarter  of  a  century  it  has  had  a  hard  struggle  to 
keep  itself  anywhere  near  the  old  standard  of  pros- 
perity. To  do  this  it  has  had  to  draw  for  the 
greater  part  of  its  returns  upon  foreign  commerce, 
and  been  forced  to  compete  with  English  companies. 
Fire-insurance  has  not,  as  a  whole,  fared  much  better. 

So  distinct  are  the  differences  in  the  business 
operations  of  these  two  lines  of  insurance  that  it  is 
necessary  to  treat  of  each  separately.  The  theory 
of  fire-insurance  is  exceedingly  simple — it  collects 
from  the  many  and  distributes  to  the  few,  relying 
for  its  profit  upon  an  intelligent  calculation  of  the 
chances  of  fire  and  the  collection  of  more  than  it 
distributes.  The  sources  of  profit  are  twofold :  first, 
interest  upon  invested  funds ;  second,  excess  pre- 
mium receipts  over  losses  and  expenses. 

Reviewing  the  history  of  fire  underwriting  for  the 
past  century,  it  cannot  be  classed  as  one  of  the 
profitable  departments  of  business  activity.  A  cer- 
tain number  of  companies  have  been  successful,  but 
only  a  very  insignificant  percentage  of  the  various 
companies  organized  in  the  United  States  during 
the  past  century  have  sustained  life  for  a  score  of 
years.  Only  one  American  company  which  was  in 
existence  in  1795  is  now  in  successful  operation. 
It  is  the  Insurance  Company  of  North  America,  of 
Philadelphia,  organized  in  1794,  and  which  now 
has  a  cash  capital  of  $3,000,000,  with  total  assets 
of  nearly  $10,000,000. 

The  large  conflagrations  of  the  century  at  New 
York,  Chicago,  Boston,  Philadelphia,  Portland,  and 
Pittsburg  each  in  turn  crippled  all  interested  com- 
panies and  ruined  many;  but,  as  experience  is  a 
dear  but  a  sure  teacher,  these  fires  brought  about 


needed  improvements  in  municipal  fire  departments, 
and  led  to  new  safeguards  in  underwriting.  At  the 
time  of  the  great  New  York  fire  in  1835  there  were 
about  forty  companies  doing  business  in  the  city, 
and  all  but  two  found  themselves  hopelessly  in  debt 
when  the  blaze  had  burned  itself  out.  The  two 
companies  spared  were  the  Bowery  Fire  and  the 
Jefferson,  which  had  not  taken  many  risks  down- 
town, in  which  section  of  the  city  the  fire  raged. 
To  save  the  companies  from  utter  ruin  the  legisla- 
ture passed  an  act  on  February  20,  1836,  allowing 
them  to  take  what  assets  they  had  and  pay  their 
losses,  without  interfering  with  their  charters.  This 
privilege  was  granted  for  a  limited  period.  About 
ten  companies  availed  themselves  of  this  opportu- 
nity, and  then  obtained  a  new  capital  and  continued 
in  business.  Twenty-eight  of  the  remaining  thirty 
companies  never  recovered  from  the  blow.  The 
company  paying  the  greatest  percentage  of  losses 
was  the  Howard,  which  gave  fifty-eight  per  cent. 
To-day  there  are  only  two  companies — the  Eagle 
Fire  and  the  North  River — in  existence  that  sur- 
vived the  conflagration  of  1835.  Ten  years  later 
there  was  another  great  fire  in  New  York,  in  which 
the  damage  was  also  large ;  but  neither  the  public 
nor  the  insurance  companies  suffered  as  much  com- 
paratively, owing  to  more  careful  underwriting.  The 
fire  of  1845  brought  about  a  schedule  of  new  tariff 
rates,  which  lasted  until  1850. 

The  Chicago  fire  of  1871  was  the  most  disastrous 
conflagration  underwriters  have  ever  known.  It  has 
been  accurately  estimated  that  $118,000,000  worth 
of  property  was  destroyed,  on  which  the  insurance 
amounted  to  $92,000,000.  Of  this  sum  companies 
outside  of  the  State  of  Illinois  had  written  $58,144,- 
ooo,  and  while  the  exact  amount  held  by  Illinois 
companies  could  never  be  ascertained,  it  was  calcu- 
lated to  be  $33,878,000.  $39,233,000  was  paid  to 
the  assured  by  the  companies  outside  of  the  State. 
About  every  insurance  company  involved  in  the  fire 


84 


HENRY  H.  HALL. 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


was  forced  to  make  assessments  on  its  stockholders 
in  order  to  live.  Credit  is  due  to  the  Liverpool, 
London  &  Globe  Insurance  Company  for  their 
promptness  in  paying  the  amount  of  their  losses  at 
Chicago ;  but  to  the  Home  of  New  York,  ALtna.  of 
Hartford,  as  well  as  to  many  other  American  com- 
panies, equal  credit  is  due.  The  strength  of  many 
American  companies  was  manifested  by  this  severe 
trial,  and  the  necessity  for  foreign  capital  was  fully 
demonstrated.  It  is  safe  to  say  that  over  one 
hundred  companies  were  driven  to  the  wall,  while 
every  company  in  the  State  of  Illinois  was  wiped 
out.  Shortly  after  the  Chicago  fire  came  the  great 
Boston  fire,  both  preceded  by  the  one  in  Portland, 
each  adding  its  proportion  to  the  general  wreck  of 
fire-insurance  companies. 

It  may  therefore  be  very  readily  seen  that  the 
business  of  fire  underwriting  in  the  United  States  for 
the  past  century  has  been  done  at  a  loss,  and  the 
most  successful  companies,  as  a  whole,  have  not 
retained  more  than  simple  interest  upon  their  capi- 
tal and  invested  funds.  The  question  has  been 
asked  many  times,  Why  cannot  this  important  inter- 
est be  placed  on  such  foundations  as  to  present  a 
reasonable  hope  of  profit  to  capitalists  on  their 
investment?  The  chief  obstacle  to  this  attainment 
has  been  the  ignorance  of  legislators.  Every  year 
the  fire-insurance  interest  runs  the  gauntlet  of  the 
legislatures  of  all  the  States,  protecting  themselves 
from  attacks  made  with  a  persistency  born  of  igno- 
rance, suspicion,  and  prejudice.  Every  recurring 
legislature  is  freighted  with  schemes  without  num- 
ber to  "  regulate  "  the  fire-insurance  business.  To 
the  average  legislator  there  is  just  enough  mystery 
about  the  business  to  tempt  him  to  the  same  mental 
exertion  he  displays  on  the  "  Thirteen  Puzzle  "  and 
in  squaring  the  circle. 

Every  insurance  company  must  exhibit  for  publi- 
cation its  premiums  and  losses  in  every  State  where 
it  transacts  business,  and  every  detail  of  its  manage- 
ment is  open  to  public  inspection.  It  is  a  blow  to 
all  originality,  a  handicap  to  enterprise,  when  skill 
and  knowledge  gained  by  experience  are  thus  given 
to  every  competitor ;  but  this,  even,  does  not  satisfy 
our  lawmakers.  Various  schemes  of  taxation  are 
devised,  State  and  municipal,  to  which  are  added  all 
the  forms  of  restrictive  legislation  that  the  mind  of 
man  can  conceive.  In  many  States  insurance  com- 
panies are  denied  recourse  to  the  United  States 
courts,  must  submit  to  policy  forms  drafted  by  the 
various  legislatures,  and  are  compelled  to  adopt  such 
methods  of  loss  adjustment  as  can  be  comprehended 
by  the  feeblest  lawmaking  mind.  The  history  of 


fire  underwriting  for  the  past  century  is  a  record  of 
the  incapacity  of  American  legislators. 

The  aggregate  fire  premiums  collected  annually 
in  the  United  States  amount  approximately  to 
$140,000,000.  This  is  a  tax  levied  upon  every 
property  owner  in  the  United  States.  If  complaint 
is  made  of  the  expense  of  continuing  the  fire-insur- 
ance business,  it  should  be  recalled  that  the  fire- 
insurance  capital  of  the  world  is  at  the  command 
of  the  resident  of  the  smallest  village.  With  few 
exceptions,  the  largest  manufacturing  plant  can 
secure  in  the  village  in  which  it  is  located  ample 
insurance  from  the  strongest  companies  in  the 
world ;  and  if  loss  occurs,  the  same  is  adjusted  and 
paid  on  the  ground.  To  afford  these  facilities  vast 
and  expensive  organizations  are  necessary.  Every 
important  insurance  company  has  a  large  staff  of 
special  agents  and  adjusters,  and  in  addition  to  this 
there  are  many  associations  to  advance  the  interest 
of  associate  companies.  Among  these  is  the  National 
Board  of  Fire  Underwriters,  composed  of  the  lead- 
ing companies  of  the  country,  which  was  organized 
in  1866.  The  chief  work  of  this  organization  is  on 
the  line  of  public  benefit,  such  as  the  recommenda- 
tion of  proper  building  laws  to  the  various  munici- 
palities of  the  country;  the  inspection  of  all  fire 
departments,  with  suggestions  for  their  improvement 
and  the  increase  of  their  efficiency ;  and  the  arrest 
and  punishment  of  incendiaries.  Through  the 
efforts  of  this  board  the  people  have  been  educated 
as  to  the  true  economy  of  good  building  laws  and 
efficient  fire  departments.  Within  the  past  few 
years  the  board  has  maintained  an  electrical  bureau, 
and  by  experiments  and  investigation  has  done 
much  to  minimize  the  hazard  incident  to  the  gen- 
eral use  of  electricity  for  light  and  power.  With 
great  labor  and  expense  it  is  endeavoring  to  awaken 
public  interest  to  the  great  drain  on  the  national 
resources  by  the  annual  fire  waste,  so  large  a  portion 
of  which  is  due  to  careless  building  and  lax  munici- 
pal administration.  In  addition  to  this  organization 
the  fire  underwriters  maintain  in  every  State  and  in 
every  town  local  boards  of  underwriters,  for  the 
collection  of  statistics,  upon  which  equitable  rates 
can  alone  be  predicated. 

Through  the  influence  of  the  New  York  Board  of 
Fire  Underwriters  a  paid  fire  department  for  the  city 
of  New  York  was  secured.  The  fire-insurance 
companies  are  also  maintaining,  at  their  own  ex- 
pense, fire  patrols  in  thirty  of  the  large  cities.  These 
patrols  are  established  by  law,  and  supported  entirely 
by  the  fire-insurance  companies  transacting  the  busi- 
ness in  their  several  localities.  New  York  City  was 


86 


ONE   HUNDRED  YEARS   OF  AMERICAN   COMMERCE 


the  pioneer  in  the  establishment  of  these  organi- 
zations, and  they  are  organized  to  protect  life  and 
property  at  fires,  regardless  of  the  insurance  interest 
therein ;  and  the  New  York  Board  of  Fire  Under- 
writers has  already  distributed  numerous  gold  med- 
als to  its  patrolmen  for  heroic  efforts  in  the  saving 
of  life.  Fire  underwriters  stand  unrivaled  by  any 
form  of  purely  business  association  in  their  success- 
ful efforts  for  the  general  good. 

Reviewing  the  history  of  fire  underwriting  for  the 
past  century,  there  can  be  observed  a  steady  advance 
in  the  methods  and  practice  of  the  business.  There 
must  always  be  an  element  of  chance  in  its  conduct, 
but  there  has  been  a  gradual  advance  to  a  more 
scientific  basis  of  action.  In  the  past  fifty  years 
there  has  been  a  complete  change  in  the  controlling 
principles  of  the  business.  The  older  method  was 
to  "accept  the  risk  as  you  find  it,"  and  charge 
accordingly.  The  more  modern  method  is  to  sug- 
gest improvements,  with  a  view  to  a  lower  rate  and 
larger  liability.  To  make  this  more  clear,  in  days 
past,  underwriters  would  accept  a  small  "  line  "  on  a 
poor  risk  at  a  high  rate ;  but  the  present  method 
is  to  decline  it  altogether  and  suggest  improve- 
ments, and,  when  made,  give  a  lower  rate  and  larger 
line. 

The  fire  underwriters  now  maintain  several  very 
expensive  organizations  of  expert  surveyors  for  the 
sole  purpose  of  instructing  manufacturers  as  to  the 
best  means  of  fire  protection,  that  the  lowest  rate  of 
fire-insurance  may  be  secured.  This  entire  change 
of  method  is  due  to  the  influence  of  the  New  Eng- 
land system  of  mutual  insurance ;  and  it  is  but  sim- 
ple justice  to  these  companies,  of  which  Edward 
Atkinson  is  now  the  official  head,  that  this  recogni- 
tion should  be  made. 

The  conflict  between  projectile  and  armor-plate 
is  no  more  interesting  than  the  constant  combat  be- 
tween increase  in  the  size  of  buildings  and  growth 
of  cities,  and  the  improvement  in  fire-extinguishing 
facilities  shown  by  the  development  of  the  New 
England  system.  The  inception  of  this  system  was 
due  to  the  lack  of  proper  recognition  by  stock  com- 
panies of  improved  appliances  for  the-extinguishing 
of  fire.  A  manufacturer,  having  introduced  a  fire- 
pump  in  his  mill,  asked  for  a  reduction  of  rate  for 
this  appliance.  It  was  denied.  Other  manufac- 
turers were  interested,  and,  having  equipped  their 
mills  with  fire-pumps,  a  mutual  company  was  organ- 
ized ;  and  from  that  time  there  has  been  a  constant 
study  to  reduce  the  fire  hazard,  and  to  secure  insur- 
ance indemnity  at  least  cost  by  the  agency  of  a 
mutual  system.  From  a  simple  pump  to  perforated 


sprinklers,  thence  by  various  improved  devices  to 
the  present  perfected  automatic  sprinkler  head,  were 
gradual  steps  in  the  line  of  defense  against  fire. 

The  general  introduction  of  automatic  sprinklers 
has  not  only  reduced  the  fire  waste,  but  will  eventu- 
ally (with  slow-burning  construction)  revolutionize 
the  practice  of  fire  underwriting;  for,  with  less 
liability  to  fire,  the  stronger  companies  will  increase 
their  acceptances  on  individual  risks,  thus  concen- 
trating the  business  in  a  smaller  number  of  com- 
panies, and  reducing  competition  and  expense. 

Starting  from  the  change  in  the  conception  of  the 
province  of  the  underwriters,  the  advance  to  the 
present  practice  is  plain  and  logical.  In  former 
times  the  underwriters  would  promulgate  minimum 
rates  for  various  classes  of  merchandise — sole- 
leather,  package  dry-goods,  etc.  Upon  each  of 
these  various  classes  a  uniform  rate  would  be  made 
for  brick  and  frame  buildings.  Assuming  the  rate 
to  be  adequate  to  pay  the  losses  and  a  profit  on  this 
class,  this  system  was  clearly  inequitable.  If  the 
stock  of  one  merchant  was  in  a  two-story  brick 
building  of  small  area,  with  no  open  skylights,  etc., 
it  was  certainly  unfair  to  charge  him  the  same  rate 
as  the  merchant  whose  stock  was  in  a  higher  and 
larger  building,  with  skylights,  wood  cornice,  and 
well-holes.  To  rectify  this  and  similar  cases  of  in- 
equality a  plan  of  schedule  rating  was  put  in  force 
by  General  Arthur  C.  Ducat,  of  Chicago.  While 
surveyor  of  the  Chicago  Board  of  Fire  Underwriters 
he  formulated  a  plan  of  schedule  rating,  constructing 
a  theoretically  perfect  building,  and  adding  for  defi- 
ciencies of  construction.  Within  the  past  few  years 
this  system  of  schedule  rating  has  been  elaborated 
by  President  F.  C.  Moore,  of  the  Continental  Insur- 
ance Company,  of  New  York.  A  universal  mercan- 
tile schedule  has  been  devised  by  him,  which  adopts 
the  same  principle  for  various  classes  of  towns  and 
cities.  This  system  has  already  been  adopted  by 
local  underwriters  in  several  of  the  larger  cities. 
The  application  of  this  principle  will  lead  to  a  grad- 
ual improvement  in  the  construction  of  buildings, 
and  ultimately  to  the  modern  "  fire-proof,"  or,  more 
correctly,  "  buildings  of  slow-burning  construction." 
In  the  line  of  schedule  rating,  and  a  corollary 
thereto,  is  the  general  introduction  of  the  "  coinsur- 
ance clause."  With  the  improvement  in  the  con- 
struction of  buildings  and  the  increased  efficiency  of 
fire  departments,  and  with  the  aid  of  fire  patrols,  it 
is  expected  (and  to  some  degree  realized)  that  the 
percentage  of  loss  by  fire  will  be  reduced — a  fact 
that  many  property  owners  have  not  failed  to 
appreciate,  and  many  have  inclined  toward  a  reduc- 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


87 


tion  of  the  percentage  of  insurance  carried  to  valu- 
ation. 

Fire-insurance  rates,  to  be  equitable,  must  not 
only  be  predicated  upon  the  construction  and  en- 
vironment of  each  building  insured,  but  must  also 
have  relation  to  the  percentage  of  insurance  to  value 
carried  by  the  merchant.  The  sole  object  of  the 
various  forms  of  coinsurance  clauses  insisted  upon 
by  fire  underwriters  is  to  secure  a  uniform  practice 
upon  the  part  of  property  owners  as  to  the  percen- 
tage of  values  insured. 

Each  State  has  an  insurance  department,  to  which 
all  classes  of  insurance  companies  doing  business  in 
the  State  must  make  an  annual  statement  of  their 
financial  condition.  The  head  of  such  department 
is  charged  by  statute  with  the  duty  of  determining 
the  solvency  of  every  company  applying  for  permis- 
sion to  transact  business  in  his  State,  as  well  as 
at  the  time  of  the  renewal  of  the  annual  license. 
The  system  of  State  supervision  was  first  adopted 
by  the  States  of  New  York  and  Massachusetts ;  and 
the  policy  adopted  by  William  Barnes  and  Elizur 
Wright,  respectively  superintendents  of  the  insurance 
departments  of  the  States  named,  for  the  govern- 
ment of  such  departments  has  been  generally  fol- 
lowed, and  in  the  main  the  standard  of  personal  and 
official  probity  established  by  these  gentlemen  has 
been  observed,  with  a  few  monumental  exceptions. 
There  is  no  class  of  government  officials,  either 
State  or  national,  in  whom  is  vested  such  autocratic 
power  as  is  accorded  the  superintendents  of  the  in- 
surance departments  of  the  various  States.  This 
power,  exercised  wisely  in  the  protection  of  the  pub- 
lic against  fraudulent  institutions,  is  beneficent  and 
mutually  advantageous  to  the  reputable  companies 
and  the  public ;  but  when  exerted  in  securing  and 
publishing  the  smallest  detail  of  management,  it  is  a 
barrier  to  proper  development,  and  when  exerted 
corruptly  it  becomes  legalized  blackmail,  of  which, 
unfortunately,  there  have  been  a  few  instances. 

The  business  of  insurance  supports  many  trade 
papers,  many  of  them  useful  and  edited  with  great 
skill  and  ability.  The  "Insurance  Cyclopedia" 
(published  by  the  "  Weekly  Underwriter,"  one  of 
the  best  insurance  journals)  gives  a  list  of  fifty-one 
such  papers  now  regularly  issued.  Fire-insurance 
is  now  conducted  throughout  the  United  States  by 
thousands  of  agents,  and  the  percentage  of  funds 
lost  through  misappropriation  is  infinitesimal.  These 
agents,  as  a  rule,  are  selected  with  great  care. 
From  the  ranks  of  insurance  agents  have  sprung 
governors  of  States,  judges,  senators,  and  foreign 
ministers. 


At  the  present  time  there  are  five  British  com- 
panies engaged  in  the  business  of  fire  underwriting 
in  the  United  States  that  have  been  continuously  in 
business  for  over  a  century,  to  wit :  London  Assur- 
ance Corporation,  organized  1720;  Norwich  Union 
Insurance  Company,  organized  1797;  Phoenix  As- 
surance Company,  organized  1792  ;  Sun  Fire  Office, 
organized  1710;  Union  Assurance  Society, organized 
1714.  To-day  the  fire-insurance  companies  of 
foreign  countries  transact  twenty  per  cent,  of  the 
entire  business  of  fire  underwriting  in  the  United 
States. 

The  distribution  of  the  risks  assumed  by  the  fire- 
insurance  companies  doing  business  in  the  United 
States  is  shown  by  the  following  table  of  the  amount 
at  risk  and  premiums  collected  in  1 894 : 


AMOUNT  AT  RISK. 

PREMIUMS. 

Alabama  

$66,828,364 

$1.  067.44C 

Alaska  

1,110,545 

23,726 

Arizona  

A,  7  I  O,  ^68 

IOC  4C4 

Arkansas  

32,620,429 

7O;.  3Q8 

California. 

777.813.802 

Colorado  

85,894,340 

1,422,026 

Connecticut  

221,828,297 

2,171,851 

Delaware             .    .    , 

IQ.67Q.838 

I  ?6  1  1  7 

District  of  Columbia  

75,148,286 

47?.?O2 

26,698  005 

cn6  77C 

Georgia  

138,769,873 

1,905,826 

Idaho  

c,  007.466 

1SI.O7Q 

04.6.661  803 

II,8o5   *?O 

Indian  Territory  .  . 

4,  c  70.368 

I2?.6l4 

Indiana  

268,107,483 

3,480,419 

272.  OI  I  QCQ 

3.86?  471 

Kansas  

I4O,  IO9,8O2 

1,961,450 

l8?.  3Q7  787 

2.6o?  337 

IQ7.442  627 

2.64Q  323 

Maine          

04,80,4.  47  C 

I.477.28Q 

Maryland  

214,414,675 

1,859,261 

687.417..  28l 

7,648,208 

Michigan  

283,738,338 

4,302,988 

Minnesota  

233,942,097 

3,680,966 

Mississippi  

37,951,832 

787,985 

348,602,501 

4,903,494 

Montana  

26,852,407 

626,905 

107,641,249 

1,816,538 

Nevada  

4,182,969 

119,813 

64,784.  C7I 

853,063 

433,4C7,6CQ 

3.73?,  083 

7,302,979 

147,579 

New  York 

3.078.604.  7OC 

22.33Q.42O 

48,274,243 

783.7(;i 

North  Dakota  

18,088,057 

3QO.C76 

Ohio 

C.64,Q2C,  QIO 

6.  74Q.  33? 

4,438,202 

II4,O75 

Oregon    

45,287,428 

936,068 

886.271.  7^0 

Q,  8o8,<;72 

00.474,  C.  3.2 

Q4O,O?4 

South  Carolina  

43,057,308 

639,698 

South  Dakota 

1  8.  74?.  334 

306.04.7 

115,880,325 

1,784,281 

179,937,487 

3,217,273 

Utah  

20,644,800 

357,886 

3  3,878,  28Q 

512,612 

1  10,663,406 

1,598,356 

Washington  

54,018,972 

1,181,901 

3Q,O34,CC4 

476,487 

Wisconsin  

21C.  243,70? 

4,237,866 

Wyoming  

6,922,024 

132,262 

ONE   HUNDRED   YEARS  OF   AMERICAN   COMMERCE 


The  history  of  American  marine  insurance  begins 
in  1793,  when  the  General  Assembly  of  Pennsyl- 
vania chartered  the  Insurance  Company  of  North 
America.  This  company  is  still  in  existence,  and 
its  long  life  is  in  a  measure  due  to  its  special  charter 
privileges  of  being  able  to  conduct  a  marine  as  well 
as  a  fire  insurance  business.  In  1796  the  second 
marine-insurance  company  was  formed  under  the 
name  of  the  New  York  Insurance  Company,  with  a 
capital  of  $500,000.  Since  that  time  twenty-seven 
other  marine  companies  have  been  organized  and 
commenced  business  in  New  York  State,  and  of 
this  number  only  one,  the  Atlantic  Mutual,  which 
was  chartered  in  1842,  is  still  in  operation. 

New  York's  marine-insurance  history  is  that  of 
all  the  other  seaboard  States,  for  in  nearly  all  marine 
insurance  once  flourished,  but  has  now  succumbed 
to  English  competition.  The  golden  period  of 
American  marine  insurance  was  between  the  years 
1840  and  1860,  when  the  clipper  sailing  ship  was 
developed  and  perfected.  In  those  times  the  lead- 
ing merchants  owned  their  own  ships,  and  frequently 
a  member  of  the  firm  would  go  to  China  or  the 
East  Indies  to  supervise  the  proper  distribution  of 
the  cargo,  and  to  secure  a  remunerative  one  for  the 
return.  The  ship  and  cargo  were  insured  with  an 
American  company,  and  as  it  might  be  as  long  as 
nine  months  before  the  vessel  was  heard  from,  the 
risk  was  considerable  and  rates  were  high.  As 
much  as  five  or  six  per  cent,  was  charged  for  insur- 
ance in  those  times.  The  rate  on  dry-goods  from 
Liverpool  to  New  York  in  the  old  packet  sailing 
ships  was  placed  at  two  per  cent.  This  trade  was 
carried  in  American  ships,  and  the  insurance,  both 
on  the  vessel  and  on  the  cargo,  was  naturally  placed 
in  American  companies. 

But  the  rates  of  insurance  have  changed  with  the 
transformation  of  the  ocean  carrying  service.  The 
East  India  goods  are  now  shipped  across  the  Pacific 
to  San  Francisco,  and  thence  East  via  rail.  The 
cost  of  insurance  on  these  is  now  only  three  quar- 
ters of  one  per  cent.  Rates  on  the  Atlantic  have 
likewise  declined.  Insurance  on  dry-goods  and  like 
merchandise  carried  in  the  modern  "liners"  is 
placed  at  two  tenths  of  one  per  cent.  In  other 
classes  of  goods  depreciation  in  rates  is  in  like  pro- 
portion. 

Marine  underwriters  do  not  ascribe  the  decline  in 
American  marine  insurance  to  any  trouble  from 
unwise  laws  or  legislative  interference,  but  to  the 
changed  business  conditions  and  to  English  compe- 
tition. The  bulk  of  the  carrying  trade  of  the  world 
has  passed  into  British  hands,  and  a  British  mer- 


chant and  ship  owner  insures  in  a  British  company. 
The  English  marine  companies  have,  as  well,  invaded 
American  soil,  and  have  secured  a  large  portion  of 
the  American  business.  When  the  English  com- 
panies first  established  themselves  in  America,  along 
in  the  early  seventies,  they  began  cutting  rates. 
The  American  companies  did  not  effect  any  com- 
bination to  prevent  this,  but  followed  their  example. 
The  American  companies  were  also  placed  some- 
what at  a  disadvantage  by  the  laws  governing  the 
admission  of  foreign  marine-insurance  corporations. 
The  foreign  companies  are  required  to  make  a 
deposit  before  they  can  write  American  business ; 
but  in  New  York  State,  which  has  stringent  insur- 
ance laws,  the  amount  is  fixed  at  the  minimum 
capitalization  allowed  a  home  company,  viz.,  $200,- 
ooo.  So  much  of  the  carrying  trade  of  the  world 
is  done  under  the  British  flag  and  with  the  aid  of 
British  credit,  and  with  countries  under  British  con- 
trol, that  the  American  underwriter,  working  against 
all  these  disadvantages,  is  seriously  handicapped. 
Therefore,  there  being  no  national  or  local  tariff  asso- 
ciations among  marine  underwriters,  the  American 
companies  are  worsted  in  this  rate  war.  There 
are  now  not  enough  of  them  to  form  any  sort  of  an 
association  which  would  wield  much  power. 

Despite  the  uphill  work  of  the  American  com- 
panies to  hold  their  own,  through  loss  of  prestige 
on  the  ocean  and  active  rivalry  on  land,  there  are  a 
number  of  stock  and  mutual  American  marine-insur- 
ance companies  which  continue  to  do  a  flourishing 
business.  The  largest  and  one  of  the  oldest  is  the 
Atlantic  Mutual,  of  New  York,  which  has  over 
$12,000,000  of  assets,  and  has  been  most  carefully 
managed  throughout  its  career.  It  was  formed  in 
1842,  at  the  time  when  many  stock  companies  were 
turned  into  mutual  companies,  and  by  which  change 
the  profits  accrue  to  the  policy  holders  instead  of 
the  stockholders.  The  company  is  noted  for  retain- 
ing its  faithful  and  tried  officers  until  their  death. 
The  late  John  P.  Jones  was  connected  with  the 
company  for  fifty  years,  and  was  its  president  for 
forty.  In  his  life-work  of  building  up  the  company 
he  was  ably  assisted  by  Vice-Presidents  W.  H.  H. 
Moore  and  A.  A.  Raven,  who  have  been  with  the 
company  thirty  and  forty  years  respectively.  Among 
the  other  large  companies  which  still  do  a  thriving 
business  are  the  two  Boston  corporations,  the  China 
Mutual  and  the  Boston  Marine. 

There  have  never  been  many  marine  Lloyds  in 
the  United  States,  though  this  form  of  marine  insur- 
ance has  been  most  in  vogue  in  marine  underwriting 
in  Great  Britain.  The  origin  of  the  term  is  both 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


SUMMARY  OF  RISKS  IN  FORCE  AND  PREMIUMS  CHARGED  THEREON  DECEMBER  31,  1889,  BY  THE 

FIRE,  OCEAN  MARINE,  AND  INLAND  NAVIGATION  AND  TRANSPORTATION  INSURANCE 

COMPANIES  TRANSACTING  BUSINESS  IN  THE  UNITED  STATES. 

BY  CLASSES. 


CLASSES  AND  STATES  IN 
WHICH  HOME  OFFICES  ARE 

LOCATED. 

NUMBER 

OF 

COM- 
PANIES. 

FIRE,  OCEAN  MARINE,  AND  IN- 
LAND RISKS  IN  FORCE,  AND 
PREMIUMS  CHARGED  THEREON, 
DECEMBER  31,  1889. 

CLASSES  AND  STATES  IN 
WHICH  HOME  OFFICES  ARE 
LOCATED. 

NUMBER 

OF 

COM- 
PANIES. 

FIRE,  OCEAN  MARINE,  AND  IN- 
LAND RISKS  IN  FoKCE,  AND 

PREMIUMS  CHARGED  THEREON, 
DECEMBER  31,  1889. 

AMOUNT  IN 
FORCE. 

PREMIUM! 
CHARGED. 

AMOUNT  IN 
FORCE. 

I'REMIUMI 
CHARGED. 

Total  

1,926 

$18,691434,190 

$211424,242 

Class  3  A 

5 

$127,613,864 

$',730,377 

Class  I 

Maine  

434 

'5.4I3.429.842 

174,201,696 

i 

2 
2 

152 

1,748406 
7,949,890 
117,915,568 

971,866,938 

135,000 
194,076 
1,401,301 

23fr»007 

Alabama  

7 
i 
ii 
i 
10 
ii 

1 

'6 
10 

12 

'16 

2 
14 

>S 
3 

•1 

4 

•j 

10 

57 
3 
i 
'29 
'6 
342 

3 

i 

'6 
'4 

2 
'I 
I 

8 
"6 

39 

^ 
3 

30,789,209 

383,678,2^8 
4,788,204 

1.359,878,764 
37-754,794 
29431,941 
342,381,1^6 
10,172,607 
173,392,934 
65-045.177 
144,181430 

1,885,379 
111,536402 
406,517,661 
59,517482 
113,469,208 
5,038,207 
76,252,301 
46,163,699 
163,398,665 
282,878,026 
4,965,230,523 
2,787430 
8,300 
213,216,829 
22,147,389 
1,785,670413 
136,689,339 
62406 
16,636,119 
32,4-<4,8o8 
8,898,345 

428,382 
14,061 

5>803.335 
74.907 
16,399,218 

198455 
453.182 
5,459474 
99,630 

3,243,525 
908,167 
2,161,380 
126,526 
820,519 
5,597,740 
764,025 
1,506,046 
108,940 
1,028,840 
885,966 
2,062401 
2,884,863 
46,021,786 
60413 

304 
2,623,036 

655-94S 
24,211,683 
1,679,380 
840 
405,580 
525,685 
223,219 

Class  4  

Connecticut    
District  of  Columbia.  . 

Connecticut    

I 

3 

2 
I 
'II 

'2 

5 

2 

3 
10 

21 

2 
12 

7 

10 
12 
,I7 

3  I9 
I 
I 
*I 
*I 
2 

3 
I 

2 
I,28l 

9.277.077 
25,988,388 

'3-7  '5.239 
20435,693 
33,321,034 
4,040,998 
22476,902 

4,391.567 
5-709452 
47,297,788 

269,167,557 
12,062,098 

54,330,327 
11,481,171 
31,118,584 
145,245,931 

75,075.375 
99,510,249 
19,291414 
3.543,955 

256,294 
93.406 
25,688 
241,213 

M9'.233 
327,800 
1,207,608 
84,217 

37.933 
920,895 
4,013430 
612,156 
1,778,083 

"89,053 
2,265,924 
1,354,681 
1,001,589 
2,590,723 
175,023 
60,305 

Delaware  
District  of  Columbia  . 
Georgia  

Illinois  

Indiana  

Iowa  

Kansas  

,,       i     j  

Kentucky    

Maryland  

Massachusetts  

rg*m 

Minnesota  

Missouri    
New  Hampshire.  .  .  . 
New  Jersey  

New  Hampshire  .... 

New  York 

Ohio  

Pennsylvania  

XT     *t,  |2     Y  

Rhode  Island  

South  Carolina  

Tennessee  

Texas  

Vermont  

49,999,981 
11,121,594 
79,35° 
3.184,314 

1,561,418,038 

5,005,211 

45,822 
692 
121,028 

830,771 

Virginia    

West  Virginia  

Wisconsin  

Tennessee  

Class  5  6    

Texas  
Utah  

Vermont  
Virginia  

2,805495 
33,316,514 
2,092,760 
14,997402 
207,431,944 
4,120,105,263 

25,360,152 

3i>279 
663,102 

53,677 
611,252 
2,698,181 
42,706,752 

464,512 

Connecticut  

16 

'187 
»6o 
127 
ii 

3  29 

7 

jg 

60 

386 
6  27 
10 
30 

•i 

86 
2  178 

4 
i 
'8 
'II 
i 
'181 

78,308,021 
2,889,971 
84,166,658 
30,261,418 
65,200,389 

3.063,307 
10433,819 
11,250,866 
36,528,277 
102,592,626 
165412,143 

23,979.024 
6,778,874 

6,3364'5 
11,781,011 
36456,381 
136,919,53° 
342,074 
106461,569 
462,333,093 
35.3'2,684 
818,775 

640,334 
22,047,364 
610,000 
120493415 

Washington  

West  Virginia  



Wisconsin  

Foreign  

Class  2    

, 

i 

2 

5' 

3>5«2,38o 
21,847,772 

591,745,356 

218,118 
246,394 

10,596,879 

Maryland  

,,          V  '  '    "  

Massachusetts    

place  i 



Minnesota  

Georgia         

i 
8 

33 

i 
i 
i 
8 
3 

2 

4 

5 

12 
2 

525,221 

3L989479 
576,650 
1,628,000 
535,725 
1,287-253 
242,331,706 
6,101,882 
7,189441 
6,699,941 
14448,211 
,     273449,172 
4,982,675 

5,172 
926,303 
20,585 
70,100 
111,772 
128,712 
5,34',230 
158,722 
865,984 

93-775 
171,130 
2,546,264 
157,13° 

Illinois 

New  Hampshire  .  .  . 



Indiana 

Iowa 

Kansas 

North  Dakota 

Ohio 

830,771 

Massachusetts 

Pennsylvania   

Minnesota 

South  Carolina   .... 
South  Dakota 



Ohio 

Rhode  Island 

West  Virginia   .  

Wisconsin 

1  Includes  i  company  for  which  no  report  is  made. 

2  Includes  3  companies  for  which  no  report  is  made. 

3  Includes  2  companies  from  whom  a  statement  of  risks  in  force  could 
not  be  obtained. 


*  Only  i  company  reported  and  that  too  incompletely  to  tabulate. 

5  Includes  4  companies  which  could  not  report  risks  in  force. 

6  The  companies  of  this  class,  as  a  rule,  charge  no  premiums,  but 
assess  for  losses. 

Includes  6  companies  from  which  no  report  was  received. 


90 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


interesting  and  peculiar.  The  name  of  Lloyd  orig- 
inated in  old  Lloyd's  Tavern,  in  Tower  Street, 
London,  far  back  in  the  days  of  good  Queen  Anne. 
It  was  the  practice  of  many  ship  owners  and  trad- 
ers to  drop  in  at  the  tavern  and  talk  over  their  pro- 
spective profits ;  and  gradually  a  custom  developed 
of  inscribing  their  names  on  a  blackboard,  certifying 
that  the  men  signing  would  be  jointly  liable  for  the 
loss  of  a  vessel  during  a  certain  voyage.  From  this 
crude  beginning  have  grown  the  world-famous  as- 
sociations in  the  British  Isles.  In  the  United  States 
there  are  a  few  Lloyds,  two  of  the  principal  ones 
being  located  in  New  York  City— the  United  States 
Lloyds  and  the  New  York  Marine  Underwriters. 

The  scope  and  definition  of  a  marine  policy  is,  of 
course,  entirely  different  from  a  land  fire  policy. 
The  risks  insured  against  are  many,  and  may  be 
summarized  as  including  all  perils  of  the  sea.  There 
are  two  classes — a  voyage  and  a  time  policy;  the 
former  is  generally  used  in  insuring  vessels,  and  the 
latter  for  cargoes.  There  are  naturally  many  clauses 
governing  marine-insurance  policies,  such  as  capture, 
seizure,  war,  and  so  on.  The  life  of  the  insurance 
on  a  ship  begins  at  the  port  from  which  it  is  insured 
until  moored  for  twenty-four  hours  at  the  port  to 
which  it  is  insured.  When  an  insurance  is  made 
on  freight  to  be  carried  under  a  charter,  the  policy 
attaches  as  soon  as  the  vessel  sails,  although  she 
may  be  destined  to  a  distant  port  for  her  cargo. 

Though  single  losses  to  marine  underwriters  have 
been  small,  compared  with  some  of  those  of  fire 
underwriters,  there  have  been  shipwrecks  that  have 
lived  in  marine-insurance  men's  memories.  One  of 
the  greatest  losses  to  American  marine  insurance 
was  that  of  the  American  steamer  Central  America, 
which  foundered  off  the  Cuban  coast  in  September, 
1857.  The  Central  America  was  bound  from 
Aspinwall,  now  Colon,  to  New  York,  and  was 
loaded  principally  with  treasure  from  the  California 
gold-mines.  She  carried  insurance  amounting  to 
between  $700,000  and  $800,000,  all  of  which  had 
to  be  paid  by  American  underwriters.  Another 
notable  loss  was  that  of  the  steamer  Erie,  which 
sailed  from  Pernambuco,  Brazil,  loaded  with  coffee, 
on  January  i,  1893,  and  was  burned  at  sea.  Coffee 
prices  were  high  in  those  days,  and  the  Erie  went 
down  with  $500,000  insurance. 

Two  losses  which  not  only  made  inroads  on  the 
American  marine  companies,  but  which  also  seri- 
ously crippled  the  growth  of  American  steam  trans- 
atlantic service,  were  the  sinking  of  the  steamer 


Arctic,  off  Newfoundland,  in  1854,  by  collision,  and 
the  disappearance  of  the  steamship  Pacific,  which 
sailed  from  Liverpool  for  New  York  in  January, 
1856,  and  was  never  heard  from.  Both  steamships 
belonged  to  the  Collins  Line,  which  was  the  first 
one  to  put  on  steam-vessels  for  the  Atlantic  trade. 
These  early  losses  were  particularly  detrimental  to 
American  marine  insurance,  because  the  companies 
carried  extremely  heavy  lines  in  those  days.  Among 
the  recent  heavy  losses  was  that  of  the  steamer 
Oregon,  which  was  run  into  and  sunk  off  the  Long 
Island  coast  in  1886.  American  marine  underwrit- 
ers had  between  $700,000  and  $800,000  on  the 
Oregon's  cargo.  The  loss  of  the  Oregon  also  showed 
underwriters  how  quickly  even  a  properly  con- 
structed iron  ship  sinks.  The  introduction  of  iron 
in  place  of  wood  for  building  vessels  has  not  made 
any  material  difference  in  the  rates  of  insurance,  for 
iron  has  hazards  which  wood  has  not,  and  vice  versa. 

As  to  the  future  of  American  marine  underwrit- 
ing, it  is  difficult  to  prophesy.  As  trade  follows  the 
flag,  so  marine  insurance  flourishes  in  the  country 
with  a  prosperous  merchant  marine.  The  United 
States  is  again  forging  to  the  front  as  a  great  ship- 
building nation,  and  this  gives  American  marine 
underwriters  hope  that  American  marine  insurance 
may  follow  in  the  wake  of  the  growth  of  American 
ship  building. 

The  United  States  census  of  1890  gives  the  sta- 
tistics of  the  fire-insurance  interest  at  the  close  of  that 
year,  which  may  be  found  in  the  table  on  page  6. 

The  following  classification  is  employed  in  that 
table : 

Class  i.  —  Companies  having  a  joint-stock  capi- 
tal, and  doing  either  a  fire,  ocean  marine,  or  inland 
navigation  and  transportation  insurance  business. 

Class  2. — Companies  having  guaranty  capital,  and 
doing  either  a  fire,  ocean  marine,  or  inland  naviga- 
tion and  transportation  insurance  business. 

Class  3. — Companies  doing  a  fire-insurance  busi- 
ness on  the  mutual  plan  and  insuring  only  manufac- 
turing property. 

Class  3 A.  —  Companies  doing  a  marine-insurance 
business  on  the  mutual  plan  and  insuring  ocean-ma- 
rine risks. 

Class  4. — Companies  doing  a  fire-insurance  busi- 
ness on  the  mutual  plan  and  insuring  all  kinds  of 
property  on  land. 

Class  5.  —  Companies  doing  a  fire-insurance  busi- 
ness on  the  mutual  plan  and  insuring  only  dwellings 
and  contents  and  farm  property. 


CHAPTER    XV 

LIFE-INSURANCE 


IT  is  a  singular  fact  that  the  doctrine  of  chances, 
upon  which  the  science  of  life-contingencies  is 
based,  had  its  origin  in  the  solution  of  problems 
connected  with  games  of  hazard.     It  happened  in 
this  way.     In  the  year  1654,  the  .Chevalier  Me're',  of 
Paris,  an  ardent  gamester,  applied  to  the  celebrated 
Abbe  Pascal  for  solutions  of  two  problems  for  which 
he  himself  was  unable  to  find  answers. 

His  first  problem  was  to  ascertain  in  how  many 
casts  of  two  dice  one  might  bet  with  advantage  that 
two  sixes  would  be  thrown.  The  second  was  to  find 
a  rule  for  dividing  the  stakes  between  two  players, 
should  a  game  of  hazard  be  interrupted,  in  the  exact 
proportion  to  their  relative  chances  of  winning  at 
the  moment  of  interruption.  Pascal  considered  all 
possible  combinations  in  casts  of  two  dice,  and  all 
possible  changes  which  might  occur  in  an  unfin- 
ished game,  and  was  thus  enabled  to  solve  the  two 
problems.  He  illustrated  his  solution  by  casts  of 
dice.  While  in  a  single  cast  the  chance  that  an  ace 
would  be  thrown  is  just  one  out  of  six,  in  a  suffi- 
ciently large  number  of  casts  the  number  of  aces 
would  be  precisely  one  sixth  of  the  whole  number. 
Generalizing,  Pascal  proved  that,  by  observing  a 
sufficiently  large  number  of  happenings  in  the  past, 
he  could,  with  great  precision,  predict  the  number 
of  happenings  which  would  occur  under  similar  cir- 
cumstances in  the  future,  and  he  thus  enunciated 
the  theory  or  doctrine  of  chances.  Thus,  if  it  were 
ascertained  that  out  of  a  large  number  of  persons 
of  a  given  age,  similarly  situated  as  regards  health, 
occupation,  climatic  influences,  etc.,  a  certain  num- 
ber had  died  in  one  year,  the  percentage  of  deaths 
in  a  given  time,  under  similar  circumstances,  could  be 
predicted  with  precision,  provided  the  number  were 
large  enough  to  secure  a  proper  average.  Hence 
the  solution  of  problems  connected  with  trivial  games 
of  hazard  led  to  the  discovery  of  the  laws  of  chance, 
upon  which,  as  an  exact  science,  was  built  up  not 
only  the  theory  of  life-contingencies,  but  also  of 
all  astronomical  calculations.  By  means  of  careful 


observations  as  to  the  rates  of  mortality  which  have 
prevailed  among  a  vast  number  of  insured  lives,  at 
all  ages  and  in  different  circumstances,  we  can  fore- 
tell, with  almost  absolute  accuracy,  the  rates  of 
mortality  which  will  be  experienced  under  similar 
conditions  in  the  future.  In  other  words,  while 
nothing  is  more  uncertain  than  the  duration  of  a 
single  life,  nothing  is  more  certain  than  the  number 
of  deaths  which  will  happen  in  a  given  time,  among 
a  large  number  of  persons  under  known  conditions. 

Hence  life-insurance  has  for  its  basis  an  exact 
science,  depending  upon  inflexible  laws  of  nature ; 
so  that  it  has  been  well  said  by  the  late  Professor  De 
Morgan,  of  London,  an  eminent  authority,  "  There  is 
nothing  in  the  commercial  world  which  approaches, 
even  remotely,  the  security  of  a  well-established  life- 
office." 

In  an  abstract  or  mathematical  sense,  life-insur- 
ance is  a  bet  or  a  series  of  bets.  The  individual 
bets  the  insurance  office  that  he  will  die  within  one 
year ;  the  office  bets  the  individual  that  he  will  not  die 
within  that  time.  The  stakes,  called  the  premiums, 
are  accurately  and  equitably  adjusted — one  is  bound 
to  win,  the  other  to  lose.  The  office  gives  to  the 
individual  the  right  to  make  a  series  of  similar  bets 
during  each  of  the  remaining  years  of  his  life,  or  for 
a  limited  period. 

In  a  concrete  or  moral  sense,  life-insurance  is  pre- 
cisely the  reverse  of  gambling — unless,  indeed,  the 
individual  who  neglects  to  protect  those  dependent 
upon  him  from  pecuniary  loss  in  the  event  of  his 
own  death,  and  thus  assumes  the  risks  of  loss  to 
them,  is  a  gambler. 

Life-insurance  is  one  of  the  most  beneficent  de- 
vices of  modern  civilization.  By  its  means  the 
pecuniary  loss  and  hardship  which  would  result  to  a 
family  from  the  death  of  its  natural  protector  are  as- 
sumed by  a  vast  number  of  persons,  upon  each  of 
whom  such  loss  falls  lightly.  It  is  benevolence 
without  ostentation,  and  charity  without  humiliation. 
It  is  practically  a  fulfilment  of  the  divine  injunction 


91 


92 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


to  "  bear  one  another's  burdens,"  and  is  therefore  an 
evidence  of  the  highest  Christian  civilization. 

Important  as  was  this  discovery  by  Pascal,  it 
attracted  but  little  attention  until  1671,  when  the 
Grand  Pensionary  De  Witt,  of  Holland,  celebrated 
alike  as  a  statesman  and  a  mathematician,  conceived 
the  idea  of  applying  the  doctrine  of  chances  to  the 
valuation  of  annuities.  From  the  registers  of  births 
and  deaths  in  several  towns  in  Holland  he  deduced 
rates  of  mortality,  or  probabilities  of  living  and  dy- 
ing for  each  age.  In  a  report  to  the  States-General 
in  April  of  that  year  he  computed  the  value  of 
annuities  for  the  several  ages.  This  report  is  valu- 
able as  the  first  instance  of  the  application  of  scien- 
tific principles  to  the  solution  of  questions  depending 
upon  the  contingencies  of  living  and  dying,  com- 
bined with  the  improvement  of  money  by  interest. 
De  Witt's  report  was  lost  to  the  public  for  one 
hundred  and  eighty  years,  or  until  1851,  when  it 
was  recovered  through  the  perseverance  and  skill 
of  Mr.  Augustus  Hendricks,  actuary  of  the  London, 
Liverpool  and  Globe  Insurance  Company,  and  at 
one  time  president  of  the  Institute  of  Actuaries, 
London. 

In  1693,  the  illustrious  Halley,  astronomer  royal 
of  Great  Britain,  constructed  the  first  complete 
table  of  mortality,  in  a  form  which  has  ever  since 
been  followed,  showing  for  each  age  the  chances  of 
living  and  dying,  with  various  monetary  values  de- 
duced therefrom.  Halley's  table  was  based  upon 
the  records  of  births  and  deaths  in  London  and  in 
Breslau.  It  was  more  than  half  a  century  afterward 
before  Halley's  labors  were  applied  to  any  work  of 
importance.  As  life-insurance  became  better  known 
and  appreciated  the  necessity  of  accurate  tables  of 
mortality  became  more  evident.  The  following  list 
comprises  the  principal  mortality  tables  which  have 
at  any  time  been  used  by  life-insurance  companies : 

1.  The  Northampton  Table,  based  upon  an  enu- 
meration of  the  deaths  in  that  town  for  the  forty-six 
years  prior  to  1780,  constructed   by  Dr.  Richard 
Price.   As  the  number  of  persons  living  in  these  years 
was  not  known,  but  merely  assumed,  this  table  was 
quite  inaccurate ;  yet  it  was  used  as  a  basis  of  values 
for  many  years  by  insurance  companies,  and  by 
courts  of  law  in  the  determination  of  insurance  pre- 
miums, annuities,  and  rights  of  dower.    It  was  used 
in  the  determination  and  distribution  of  the  surplus 
of  the  Equitable,  of  London,  as  late  as  the  year  1889. 

2.  The  Carlisle  Table,  based  upon  the  numbers  of 
both  living  and  dying  in  the  city  of  Carlisle  during 
eight  years  prior  to   1787.     This  table  was  con- 
structed in  1815  by  Joshua  Milne,  actuary  of  the 


Sun  Life-Office,  and  was,  for  a  full  half-century,  the 
standard  adopted  by  British  and  American  life- 
insurance  companies.  A  great  variety  of  monetary 
values  were  computed  upon  this  table,  and  a  vast 
number  of  insurance  contracts  were  based  upon  it. 

3.  The  Actuaries'  or  Combined  Experience  Table, 
deduced  from  the  mortality  of  seventeen  British  life- 
insurance    companies,    embracing   83,905    assured 
lives.     This  table  was  constructed  in  1845,  by  the 
late  Jenken  Jones,  actuary  of  the  Guardian  Assur- 
ance Company.     It  is  valuable  as  being  the  first 
important  table  based  upon  the  actual  mortality 
among  persons  whose  lives  were  insured.    Although 
the  Actuaries'  Table  has  long  since  become  obsolete 
in  Great  Britain,  it  has  been  adopted,  and  is  still  used, 
as  the  official  standard  of  valuation  by  Massachu- 
setts and  by  several  other  state  insurance  depart- 
ments. 

4.  The  HM  (Healthy  Male)  Table,  based  upon 
the  later  experience  of  twenty  British  companies,  em- 
bracing the  mortality  among  147,000  insured  lives, 
and  completed  in  1869,  under  the  supervision  of  a 
committee  of  the  Institute  of  Actuaries.    Elaborate 
monetary  values  have   been   computed  upon  this 
table,  which  are  embodied  in  the  "  Text-book  "  by 
George  King,  actuary  of  the  Atlas.    This  table  has 
long  been  the  vade-mecum  with  actuaries,  and  until 
it  shall  be  superseded  by  tables  based  on  later  and 
more  extended  observations  will  be  the  most  reliable 
standard  of  value  in  Great  Britain. 

5.  The  American  Experience  Table  (so  called), 
constructed   by  the   writer,   and   based   upon   the 
mortality  experience  of  the  Mutual  Life-Insurance 
Company,  of  New  York,  during  its  first  fifteen  years. 
Confirmed  as  it  has  been  by  later  and  more  exten- 
sive observations  upon  the  mortality  in  that  and  in 
other  American  companies,  this  table  is  unquestion- 
ably the  best  exponent  of  rates  of  mortality  which 
may  be  expected  to  prevail  among  insured  lives  in 
the  United  States.    Rates  of  premium  and  estimates 
of  the  value  of  contingent  insurance  liabilities  in 
nearly  all  American  companies  are  based  upon  this 
table,  which  is  also  the  official  standard  of  insurance 
valuations  in  many  of  the  States. 

The  origin  of  life-insurance  is  lost  in  antiquity. 
At  a  very  early  period  the  lives  of  masters  of  vessels 
and  of  merchants  voyaging  with  them  were  insured, 
always  for  brief  periods  and  generally  by  individual 
underwriters,  against  death  or  captivity  by  pirates. 
In  the  middle  of  the  sixteenth  century,  lives  of  persons 
were  insured  for  short  periods  by  individual  under- 
writers, who  divided  the  risks  among  themselves 
very  much  in  the  manner  of  the  modern  Lloyd's. 


SlIEPPARD    HoMANS. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


03 


The  earliest  life-insurance  policy  on  record  was 
issued  June  15,  1583,  by  the  Office  of  Insurance 
within  the  Royal  Exchange,  London,  upon  the  life 
of  one  William  Gybbons.  The  insurance  was  for 
twelve  months  for  ^383  6s.  8</.,  at  a  premium  of 
eight  per  cent.  The  policy  was  underwritten  by 
thirteen  different  persons,  who  guaranteed  sums 
varying  from  ^£25  to  ^£50  each.  The  oldest  exist- 
ing office,  which  transacted  at  any  time  a  life-insur- 
ance business,  is  the  Hand-in-Hand,  London,  char- 
tered in  1696  ;  but  its  first  life-insurance  policy  was 
not  issued  until  1836.  The  earliest  purely  life- 
insurance  company  was  established  in  1 699,  under 
the  name  of  the  Society  of  Assurance  for  Widows 
and  Orphans.  This  association  had  a  brief  exis- 
tence. The  celebrated  Amicable  Society  for  a  Per- 
petual Assurance  was  chartered  March  25,  1706, 
by  Queen  Anne.  This  society  carried  on  the  busi- 
ness of  life-insurance  for  one  hundred  and  sixty  years, 
or  until  1836,  when,  under  an  act  of  Parliament,  it 
passed  out  of  existence  as  a  separate  institution  and 
was  merged  into  the  Norwich  Union  Life-Office. 
In  the  year  1721,  there  were  founded  two  insurance 
offices,  still  existing,  the  Royal  Exchange  and  the 
London  Assurance  Corporation,  each  of  which  at 
once  issued  life-policies,  and  each  has  continued  to 
do  so  until  the  present  time.  They  are  therefore  the 
oldest  existing  offices  writing  life-insurance  contracts, 
but  their  principal  business  has  always  been  that  of 
marine  and  fire  insurance.  All  of  the  offices  above 
named  charged  a  uniform  rate  of  premium  for  all 
ages  of  about  five  per  cent,  until  after  the  com- 
mencement of  the  present  century,  and  their  business 
was  conducted  upon  methods  very  similar  to  those 
practised  by  modern  assessment  associations. 

In  1762,  the  famous  Equitable  Society  for  the 
Assurance  of  Life  and  Survivorship,  of  London, 
commenced  business.  This  society  was  founded 
upon  the  recommendation  of  Dr.  Richard  Price, 
with  the  view  of  charging  rates  of  premium  adjusted 
to  chances  of  living  and  dying  at  the  different  ages. 
In  other  words,  its  business  was  from  the  first  con- 
ducted on  sound  principles.  The  society  has  had 
from  the  outset  a  phenomenal  success.  It  has  never 
employed  agents  or  paid  commissions  or  solicited 
business.  It  has  always  been  managed  with  great 
ability,  and  is  still  pointed  out  with  pride  as  the 
"  Old  Equitable."  It  has  led  the  way  in  many  of 
the  advances  and  improvements  in  the  system.  In 
the  amount  of  business  transacted  it  has  been  dis- 
tanced by  many  modern  offices ;  and  although  its 
volume  has  greatly  diminished  since  its  maximum, 
about  1816,  it  is  now  increasing  quite  rapidly.  The 


Equitable,  of  London,  is  not,  however,  as  has  gen- 
erally been  assumed,  the  oldest  office  in  existence 
doing  a  purely  life-insurance  business.  That  honor 
is  due  to  a  little  American  office  in  Philadelphia,  Pa., 
called  the  Presbyterian  Ministers'  Fund,  organized 
in  1759,  or  three  years  before  the  Equitable,  of  Lon- 
don. It  has,  for  one  hundred  and  thirty-six  years, 
pursued  quietly,  unostentatiously,  and  without  in- 
terruption the  business  of  life-insurance.  In  the 
Papers  and  Transactions  of  the  Actuarial  Society  of 
America,  No.  2,  page  83,  may  be  found  a  facsimile 
of  a  policy  issued  by  the  Presbyterian  Ministers' 
Fund,  dated  May  22,  1761,  on  the  life  of  Rev. 
Francis  Allison.  In  consideration  of  a  premium  of 
^6  annually,  it  provided  for  the  payment,  after  his 
death,  of^2o  annually,  for  a  stated  number  of  years, 
to  his  widow  and  orphans.  The  premiums  were 
based  upon  the  hypothesis  of  De  Moivre,  the  rates 
being  level  for  life.  It  is,  therefore,  the  oldest 
purely  life-insurance  company  in  existence.  It  has 
ever  kept  pace  with  modern  improvements  in  the 
science  of  life-contingencies,  and  is  to-day  in  a  sound 
condition,  with  every  prospect  of  continued  success. 

After  the  formation  of  the  Equitable,  of  London, 
in  1762,  came  the  Pelican,  in  1797,  the  London,  the 
Provident,  and  the  Rock,  in  1806,  and  new  offices 
were  started  in  almost  every  subsequent  year.  There 
were  founded  during  the  present  century,  in  Great 
Britain,  about  three  hundred  and  seventy  life-offices, 
out  of  which  only  eighty-eight,  according  to  the 
Parliamentary  Return  for  1894,  remain.  The  others 
have  had,  generally,  an  ephemeral  existence.  Some 
have  been  wound  up  voluntarily,  some  by  processes 
of  law,  some  have  been  merged  into  stronger  or 
better-organized  institutions,  and  all  have  suffered 
penalties  from  the  violation  of  sound  principles  of 
science  and  commercial  experience. 

On  the  continent  of  Europe,  life-insurance  has 
been  a  plant  of  slower  growth  and  development. 
Many  strong  offices  have  been  built  up  in  France, 
Germany,  Holland,  Belgium,  and  Austria,  with  a  few 
in  the  other  kingdoms.  It  is  in  the  United  States 
and  in  Great  Britain,  however,  that  the  system  has 
flourished  and  attained  its  highest  development. 

In  the  United  States,  the  Presbyterian  Ministers' 
Fund  was,  as  stated,  organized  in  1759,  and  is  still 
in  existence.  The  Baltimore  Life  was  organized  in 
1831,  and  was  merged  into  the  Equitable  in  1860. 
But  modern  life-insurance  dates  from  1843,  when 
the  Mutual  Life-insurance  Company,  of  New  York, 
first  commenced  business.  This  great  company,  in 
volume  of  assets  the  largest  in  the  world,  issued  its 
first  policy  February  i,  1843.  It  is  organized  upon 


94 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


the  mutual  plan,  having  no  capital,  and  its  enor- 
mous accumulations  ($203,822,134  on  December 
31,  1894)  have  resulted  entirely  from  insurance 
premiums  and  interest  thereon,  after  deducting  pay- 
ments for  death-claims  and  expenses. 

This  company  was  organized  by  friends  of  the  late 
Morris  Robinson,  solely  to  give  a  position  to  that 
gentleman.  Its  affairs  were  managed  with  great 
skill  by  him  and  by  his  successors  in  the  office  of 
president,  the  late  Joseph  B.  Collins  and  Frederick 
S.  Winston.  Under  the  present  incumbent,  Mr. 
Richard  A.  McCurdy,  the  business  and  accumula- 
tions are  rapidly  increasing.  The  history  of  the 
Mutual  Life-Insurance  Company  is  a  record  of 
phenomenal  success,  resulting  from  the  application 
of  science  and  sound  business  principles  to  the  most 
important  economy  of  modern  times,  by  men  of  ex- 
ceptional ability,  energy,  and  business  training.  The 
American  Experience  Table  of  Mortality,  so  called, 
constructed,  in  1 858,  by  the  writer,  and  since  adopted 
by  all  American  companies  and  by  many  of  the 
States  as  a  standard  of  valuation  for  premiums  and 
liabilities,  was  deduced  from  the  mortality  records 
of  this  company.  The  "  Contribution  Plan "  of 
dividing  surplus  equitably  among  the  members  of 
a  life-insurance  company  was  first  applied  by  the 
writer  in  the  distribution  of  the  surplus  of  the 
Mutual  Life  in  1863.  When  we  consider  the  vast 
amount  of  surplus  now  held  for  policy-holders  by 
American  companies,  amounting  to  more  than 
$112,000,000,  in  addition  to  over  $325,000,000  of 
surplus  already  awarded  and  paid  to  them  under 
the  "  Contribution  Plan,"  one  may  appreciate  its 
importance  and  value. 

In  the  report  of  the  Massachusetts  Insurance 
Department  for  1868,  the  commissioner,  Hon.  John 
E.  Sandford,  states : 

"  The  forty-seven  life-insurance  companies  doing 
business  in  this  State,  or  rather  twenty-one  of  them, 
were  fortunate  enough  to  find  themselves  during  the 
last  year  in  possession  of  divisible  surplus  to  the 
amount  of  more  than  seven  and  one  half  millions  of 
dollars  ($7,595,671.97).  The  whole  of  this  magnifi- 
cent fund  was  made  up  of  the  overpayments  of  in- 
dividual policy-holders,  or  was  the  surplus  earnings 
of  their  money  held  in  reserve  by  the  companies. 
They  were  consequently  entitled  to  have  it  divided 
among  them  by  some  rule  or  method  of  distribution. 
The  propriety  of  so  dividing  it  that  each  policy- 
holder  should  receive  his  own  —  the  share  of  it  which 
belonged  to  him,  neither  more  nor  less — is  too  plain 
to  need  argument  or  illustration. 

"  How,  then,  shall  it  be  divided?     This  is  not  a 


question  of  usage,  of  precedent,  or  of  convenience, 
but  of  equity  and  right — of  right  to  property,  to 
one's  own  money  ;  and  involving,  as  it  does,  millions 
of  dollars  annually,  it  is  a  question  of  the  first 
importance. 

"As  a  practical  question,  at  the  present  time,  it 
resolves  itself  into  the  discussion  of  two  essentially 
different  methods  of  distribution,  which,  with  some 
variance  of  detail,  appear  to  divide  the  practice  of 
all  the  mutual  companies.  ( i )  The  '  Percentage 
Plan '  distributes  the  surplus  by  a  uniform  percen- 
tage of  the  annual  premium — assuming,  apparently, 
that  this  premium  fairly  represents,  for  the  current 
year,  the  whole  capital  or  stock  in  trade  of  each 
policy-holder  in  the  joint  concern,  on  which  his 
share  of  the  profits  or  savings  for  the  year  is  to  be 
computed.  There  is  no  other  assumption  on  which 
such  a  mode  of  distribution  is  intelligible.  (2)  The 
'  Contribution  Plan,'  rejecting  the  annual  premium 
as  the  measure  of  distribution,  inquires  for  the 
sources  of  the  surplus — how  much  of  it  is  traceable 
to  the  surplus  earnings  of  each  one's  share  in  the 
accumulated  reserve  of  previous  years,  as  well  as  of 
the  current  premium,  and  how  much  to  each  one's 
share  in  the  savings  on  the  payments  for  losses  and 
expenses — and  professes  to  return  to  each  what  he 
or  his  money  has  actually  contributed  to  make  up  the 
sum  total  of  the  surplus  which  is  to  be  divided.  If 
one  of  these  methods  is  right  in  principle,  and  the 
other  wrong — and  they  cannot  both  be  right — the 
sooner  it  is  known  and  admitted  the  better. 

"We  think  it  admits  of  demonstration  that  the 
percentage  plan  ignores  the  origin  of  the  surplus; 
that  its  idea  is  radically  wrong,  and  discordant  with 
the  theory  and  methods  of  life-insurance ;  that  it 
gives  money  which  belongs  to  one  policy-holder, 
without  reason  or  right,  to  another,  subtracting 
from  the  dividend  to  which  the  longer  insured  is 
entitled,  to  make  for  the  newly  insured  an  equal 
dividend  to  which  he  is  not  entitled  ;  that  it  does  this 
uniformly  and  inevitably,  and  does  it  on  an  extensive 
scale.  The  equity  of  the  uniform  percentage  plan 
in  dealing  with  the  money  of  the  insured  is  like  the 
hospitality  of  the  famous  old  robber  of  Attica,  who, 
if  the  legs  of  his  unwilling  guests  were  too  long  for 
his  bed,  lopped  them  off,  and  stretched  them  to  the 
requisite  length  if  they  were  too  short. 

"The  contribution  plan,  on  the  other  hand, 
recognizes  the  constant  sources  of  surplus — a 
higher  rate  of  interest  than  was  assumed,  a  lower 
rate  of  mortality  than  was  expected,  and  a  less 
percentage  of  expense  than  was  provided  for — in 
establishing  the  premiums  and  reserve  of  the  com- 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


pany.  These  sources  yield  a  surplus  which  varies 
with  the  reserve  on  each  policy,  with  the  age  of  the 
insured,  and  with  all  the  terms  and  conditions  of  the 
insurance.  The  system  adapts  itself  to  the  incidents 
of  each  policy,  and  returns  the  surplus  earnings  from 
interest,  and  the  excess  of  the  payments  for  mortality 
and  expenses,  which  belong  to  it.  In  a  word,  it 
seeks  to  give  to  each  of  the  insured  the  surplus  which 
his  money  has  earned  or  created.  It  requires  no 
other  statement  than  this  to  demonstrate  its  theoreti- 
cal equity.  The  actual  adaptation  of  the  plan  is 
demonstrated  by  the  fact  that  its  formulas  are  de- 
duced from  and  harmonize  with  the  fundamental 
processes  of  life-insurance,  while  no  mathematics 
either  suggest  or  justify  the  percentage  plan. 

"  In  this  country,  where  every  improvement  is 
eagerly  sought  and  usually  accepted,  its  essential 
features  have  received  the  indorsement  of  the  most 
eminent  actuaries,  and  it  has  been  already  adopted 
by  a  majority  of  the  participating  companies.  The 
statutes  of  this  State  have  been  amended  in  order 
to  admit  of  its  adoption  by  our  own  companies. 
Actual  trial,  which  is  the  best  test  of  its  merits, 
seems  to  have  approved  its  equity  and  the  practica- 
bility of  its  use.  Other  companies,  whose  practice 
has  sanctioned  thus  far  the  older  plan,  are  known  to 
be  considering  seriously  its  adoption.  A  firm  belief 
in  its  superior  equity  and  in  the  general  good  results 
to  be  expected  from  its  use  cannot  fail  to  induce  the 
hope  that  this,  with  every  other  improvement  that 
science  or  experience  suggests,  may  be  ingrafted  on 
a  system  whose  present  success  and  beneficent  future 
are  cherished  and  believed  in  with  a  strong  and 
abiding  faith.  Life-insurance  claims  an  alliance 


duce  the  system  of  non-forfeiture,  since  adopted  by 
all  other  American  companies.  By  this  concession, 
policy-holders,  who  are  unable  or  unwilling  to  con- 
tinue their  contracts,  are  guaranteed  an  equitable 
surrender-value  in  paid-up  insurance  or  in  cash.  The 
company  owes  its  success  largely  to  the  ability  and 
energy  of  its  former  president,  the  late  William  H. 
Beers.  Under  its  present  able  executive,  the  Hon. 
John  A.  McCall,  its  business  is  growing  with  great 
rapidity. 

The  Equitable  Life-Assurance  Society  of  the 
United  States  was  organized  in  1859,  by  Mr.  Henry 
B.  Hyde,  who,  although  declining  to  be  its  first 
president  in  favor  of  Colonel  William  C.  Alexander, 
has  been  the  guiding  spirit  from  its  organization  to 
the  present  day.  Under  the  superb  management 
of  Mr.  Hyde,  the  Equitable  has  surpassed  its  two 
great  rivals,  the  Mutual  and  the  New  York  Life  — 
which  started  respectively  sixteen  and  fourteen  years 
prior — in  the  items  of  income,  volume  of  business, 
and  surplus.  In  one  respect  the  Equitable  is  unique 
among  all  large  life-companies,  and  that  is  in  the 
fact  that  it  has  always  remained  under  the  manage- 
ment of  one  man  from  its  organization  to  the  present 
day.  These  three  American  offices  are  by  far  the 
largest  in  the  world.  Want  of  space  prevents  men- 
tion of  other  American  life-companies  by  name. 

The  remarkable  progress  of  life-insurance  in  the 
United  States  may,  perhaps,  be  best  illustrated  by 
the  following  statistics,  compiled  from  the  reports  of 
the  Insurance  Department  of  Massachusetts  for  the 
years  ending  December  31,  1859,  and  December  31, 
1894.  The  list  includes  all  companies  which  re- 
ported to  that  department  at  the  two  dates  named. 


MASSACHUSETTS   INSURANCE   REPORTS,   1859  AND   1894. 


COMMENCED 
BUSINESS. 

AMOUNT  INSURED. 

ASSETS. 

PREMIUM  INCOME. 

SURPLUS  —  COMBINED  EX- 
PERIENCE.  4  PER  CENT. 

'859- 

1894. 

1859. 

1894. 

1859. 

1894. 

1859. 

1894- 

New  England  Mutual  . 
State  Mutual  

1844 
1845 
1851 
1851 
1843 
1845 
1846 
1850 
1849 
1850 
1859 

$ 
13,041,484 
2,876,591 
1,787.650 
4,210,380 
37,235,392 

22,559,"77 
22,701,294 

1,751-540 
4,368,542 

10,333,644 
808,000 

$ 
93,868,387 

52,909,932 
38,159,229 
89,877,280 
854,710,761 
209,369,528 
156,686,871 

64,975,950 
36,312,041 
61,618,675 
913,556,733 

$ 
1,347,637 
351,617 
106,685 
i83,5l6 
5,840,150 
2,800,717 
2,528,842 
187,768 
582,840 
670,268 
107,974 

$ 
24,252,829 
9,893,072 
6,430,146 

15,653,367 
202,494,184 
55,656,860 
62,229,586 
11,046,572 

6,592,373 
13,695,656 
183,138,559 

$ 
347,717 
57,429 
52,565 
109,387 
1,032,663 

649-157 
709,613 
46,370 
167,688 

308,354 
15,590 

$ 
3,079,506 
1,849,884 

1,455,372 
3,109,360 
36,123,164 
7,626,152 

4,677,973 
2,472,702 
988,582 
2,056,336 
36,038,931 

$ 
533.7H 
147,950 
115,007 

134,905 
1,518,868 
886,387 

849,599 
125,891 
340,684 
227,716 
91,882 

$ 
1,697,009 
1,053,008 
598,083 
1,033,620 
15,089,823 

3-577.984 
7,450,858 
1,055,001 
260,314 

774.451 
28,115,809 

Berkshire  
Massachusetts  Mutual 
Mutual  Life,  N.  Y.  .  . 
Mutual  Benefit,  N.  J  . 
Connecticut  Mutual  . 
National,  Vermont  .  . 

Manhattan,  N.  Y.  .  .  . 
Equitable,  N.  Y.  .  .  . 

with  interests  too  high  and  sacred  to  be  persistently 
guilty  of  systematic  wrong." 

The  New  York  Life- Insurance  Company  com- 
menced business  in  1845.     I*  was  tne  ^Kl  to  intro- 


Among  the  early  workers  and  fathers  of  American 
life-insurance  who  are  no  longer  living,  special  honor 
should  be  given  to  Judge  Phillips  of  the  New  Eng- 
land; Guy  R.  Phelps  of  the  Connecticut  Mutual; 


96 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


Morris  Robinson,  Frederick  S.  Winston,  Henry  H. 
Hyde,  and  Professor  Gill  of  the  Mutual  Life ; 
Joseph  L.  Lord  of  the  Mutual  Benefit ;  William  H. 
Beers  of  the  New  York  Life ;  and  last,  but  not  least, 
the  late  Elizur  Wright,  the  first  insurance  commis- 
sioner of  Massachusetts. 

There  is  one  specialty  in  the  larger  American 
companies  which  is  worthy  of  attention,  and  that  is 
the  very  large  amount  of  insurance  written  upon 
tontine  plans.  Tontine  assurance,  as  now  written, 
is  simply  an  agreement  by  which  surplus  is  retained 
and  accumulated  for  the  exclusive  benefit  of  those 
policy-holders  who  survive  and  keep  in  force  their 
policies  until  the  end  of  the  tontine  period  agreed 
upon — generally  ten,  fifteen,  or  twenty  years. 
Upon  ordinary  plans  the  surplus  is  divided  an- 
nually ;  upon  both  plans  the  full  sum  insured  is 
always  payable  at  death. 

Life-insurance  is,  in  effect,  an  arrangement  or  de- 
vice by  which  the  pecuniary  loss  to  family  or  de- 
pendents, which  would  result  from  the  death  of  their 
protector,  is  borne  by  a  large  number  of  associates, 
upon  each  of  whom  the  burden  or  loss  falls  but 
lightly.  In  the  case,  however,  of  a  person  who  dies 
after  paying  one  premium,  or  only  a  small  number 
of  premiums,  the  pecuniary  gain  to  his  beneficiaries 
is  abnormally  great,  since  the  amount  of  insurance 
is  very  large  in  comparison  with  the  premiums  paid 
therefor.  To  pay  dividends,  in  addition  to  the  in- 
surance in  such  cases,  only  aggravates  the  relative 
inequality  between  persons  dying  early  and  those 
who  live  longer  and  pay  premiums  for  many  years. 
The  tontine  system,  by  awarding  and  paying  sur- 


such  a  large  number  of  applicants  prefer  and  select 
tontine  policies  may  be  considered  a  proof  of  the 
confidence  of  the  companies  and  of  their  patrons  in 
the  system.  In  the  volume  of  business  the  tontine 
companies  surpass  by  far  the  companies  which  refuse 
to  issue  that  class  of  policies.  Incidentally,  it  is 
claimed  that  lapses  are  fewer  among  tontine  than 
among  ordinary  policies,  and  that  there  is  a  great 
advantage  to  those  who  survive  the  tontine  period 
in  the  opportunity  of  closing  their  contracts  by  re- 
ceiving their  full  equities  both  of  reserve  and  surplus 
in  cash  or  in  paid-up  insurances,  or  of  continuing 
their  policies  with  greatly  reduced  premiums. 

While  many  companies  in  the  United  States  have 
failed  and  been  wound  up,  those  now  doing  an  ac- 
tive business  are  believed  to  be  on  a  sound,  healthy 
basis.  The  cause  of  failure  in  almost  every  case 
may  be  traced  to  extravagance  or  inexperience,  but 
not  to  excessive  mortality  in  any  instance.  There 
are  at  present,  in  the  United  States,  fifty-six  regular 
old-line  life-insurance  companies,  of  which  thirty- 
two  only  are  authorized  to  transact  business  in  the 
State  of  New  York.  The  companies  not  admitted 
to  that  State,  however,  are  mostly  small  and  unim- 
portant. The  magnitude  of  the  business  in  the 
thirty-two  old-line  companies  doing  business  in 
New  York  may  be  seen  by  the  following  statistics, 
taken  from  the  report  of  the  Insurance  Department 
for  the  year  1894.  The  statistics  for  the  British 
offices  (counting  five  dollars  to  one  pound)  were 
taken  from  the  Parliamentary  Return  for  1894, 
published  in  1895.  The  business  of  industrial 
companies  is  omitted  in  both  cases. 


INSURANCE   STATISTICS   FOR    1894. 


UNITKD  STATES. 
{32  OFFICES  ONLY.) 

GREAT  BRITAIN. 

Total  insurance  in  force,  December  31,  1894   . 

$4.671;.  C83.O4.6 

$2,500,030,330 

Total  number  of  policies  in  force,  December  31,  1894 

I,78o,  3O7 

Total  income  from  premiums,  1894 

QI,  3QI.4.IC 

Total  income  from  interest,  etc.,  1894   

CI.4.Q2.4.34. 

37,662,580 

Total  income  from  all  sources,  1894  

256,624,478 

129,053,995 

Payments  for  death-claims  .... 

78.  31  3.  l62 

63,874,645 

Payments  for  commissions  $29,854,751 

Kxpenses  of  management                                     .                                     13  672  918 

Total  .  ,                                                                                             $4.^^27,660 

12,522,145 

Total  liabilities,  December  31,  1894  

Ql6  CQI    1^8 

Total  surplus,                             "         

I3Q.74.O.  54.4. 

Total  assets,                 "             "                 

I  056  331  682 

I)O38,626,O35 

Total  number  of  companies  reporting  

32 

88 

plus  to  the  latter  class  only,  equalizes  these  otherwise 
unavoidable  and  unforeseen  inequalities.  Moreover, 
each  person  should  be  allowed  full  liberty  in  the 
choice  of  different  forms  of  insurance,  and  so-called 
tontine  companies  issue  all  kinds.  The  fact  that 


In  addition  to  the  fifty-six  regular  old-line  com- 
panies, there  are,  in  the  United  States,  several  hundred 
cooperative  or  assessment  companies,  fraternal  and 
secret  associations,  in  which,  generally,  the  promise 
to  pay  the  sum  insured  in  case  of  death  is  not  def- 


ONE   HUNDRED   YEARS  OF   AMERICAN   COMMERCE 


VI 


inite  and  absolute,  but  is  made  contingent  upon  the 
result  of  assessments  to  be  collected  from  survivors. 
The  exact  number  of  these  organizations,  with  the 
number  of  members  and  the  total  amount  of  insur- 
ance, cannot  be  given,  but  the  total  insurance  in 
force  no  doubt  exceeds  eight  and  one  half  billion 
dollars  at  the  present  time,  or  nearly  double  the 
amount  outstanding  in  all  the  regular  life-insurance 
companies. 

Insurance  in  the  old-line  companies  is  secured, 
almost  invariably,  through  the  intervention  of  solicit- 
ing agents  or  canvassers,  who  are  compensated  by 
commissions  on  the  premiums  collected.  Men,  as 
a  rule,  will  not  seek  life-insurance  as  they  seek  fire 
or  marine  insurance  upon  their  houses  and  merchan- 
dise. They  require  the  urgent  solicitations  of  can- 
vassing agents  to  persuade  them  to  do  what  every 
one,  who  has  a  family  dependent  upon  his  exertions, 
should  recognize  as  a  duty  and  a  privilege.  In  the 
cooperative  or  assessment  companies  the  expense  of 
procuring  business  is  less,  but  the  quality  of  the 
insurance  is  inferior. 

In  one  respect,  life-insurance  in  the  United  States 
differs  in  a  remarkable  degree  from  that  in  Great 
Britain,  and,  in  fact,  from  that  in  all  other  countries. 
Each  of  the  United  States,  in  the  absence  of  legis- 
lation by  the  national  government,  has  power  to 
impose  restrictions,  conditions,  and  taxes  upon 
corporations  of  every  other  State  seeking  to  do 
business  within  its  precincts.  Each  State  has  its 
own  Insurance  Department  and  its  own  statutes  reg- 
ulating life-insurance.  In  consequence,  the  policy- 
holders  of  life-insurance  companies  are  subjected  to 
great  hazard,  inconvenience,  and  expense  by  reason 
of  diverse  and  oftentimes  incongruous  legislation. 
The  burden  imposed  upon  the  management  of  our 
life-insurance  companies  by  reason  of  the  require- 


ments of  the  different  States,  and  of  the  necessity 
laid  upon  them  to  protect  the  interests  of  the  policy- 
holders  by  guarding  them  against  unfavorable  and 
unwise  legislation,  is  very  serious. 

In  striking  contrast  with  the  American  system  of 
State  supervision  by  legislative  enactments  is  the 
system  adopted  in  Great  Britain.  There  the  com- 
panies are  required  simply  to  file  with  the  Board  of 
Trade  sworn  statements  as  to  the  amount  of  assets, 
of  income,  and  of  liabilities,  giving  the  table  upon 
which  such  liabilities  are  computed ;  and  the  public 
is  left  to  find  out  their  relative  merits  or  standing  by 
such  illumination  as  active  competition  and  public 
information  may  bestow.  No  attempt  at  super- 
vision of  companies  is  made,  and  in  Great  Britain 
no  tax  is  laid  upon  life-insurance.  It  is  there  as- 
sumed, and  very  justly,  that  life-insurance  is  a  pub- 
lic benefaction ;  that  it  tends  to  promote  thrift  and 
economy  on  the  part  of  its  citizens,  and  to  avoid 
the  burden  of  paupers  upon  the  state,  and  as  such 
should  be  fostered  and  encouraged  by  every  proper 
means. 

In  other  words,  life-insurance  in  the  United  States 
is  the  subject  of  supervision  and  tax  by  our  legisla- 
tive Solons,  while  in  Great  Britain  publicity  and 
natural  competition  are  relied  upon  to  keep  the 
companies  in  sound  condition.  The  two  methods 
are  in  sharp  contrast.  It  cannot  be  denied  that  the 
American  system  has  one  advantage  in  the  complete 
published  returns,  even  to  the  minutest  detail,  of  the 
items  of  assets,  liabilities,  and  methods  of  business, 
which  are  open  to  the  inspection  of  the  public. 
American  companies  are  thus  enabled  to  dispel 
honest  doubts  and  disarm  designing  criticism  by 
the  simple  logic  of  facts,  and  to  demonstrate  be- 
yond question  their  claims  to  the  confidence  of  the 
community. 

&?uj^a«s(h^r*t*^#*4^& 


CHAPTER   XVI 

AMERICAN   RAILROADS 


DYNAMICS  has  never  produced  a  greater 
power  than  the  locomotive  engine.  Stephen- 
son's  Rocket  drew  in  its  train  results  more 
momentous  in  their  relation  to  human  destiny  than 
any  motive  force  the  world  has  ever  known.  To- 
day, railroads,  their  achievements  and  their  prob- 
lems, are  of  vaster  importance  than  any  other  one 
factor  in  economic  affairs.  Evolved  from  the  dis- 
coveries that  found  steam  a  force  and  harnessed  it, 
through  the  means  of  applied  mechanics,  their  de- 
velopment has  produced  those  marvelous  feats  of 
constructive  and  engineering  skill  which  distinguish 
both  them  and  the  age  alike.  Their  extension  has 
blazed  the  path  of  progress,  and  as  they  have  built 
up,  so  have  they  bound,  the  new  sections  to  the  old, 
until  beneath  their  network  has  broadened  homo- 
geneously the  greatest  nation  on  the  face  of  the 
earth. 

Transportation,  whether  of  the  person  or  of  prop- 
erty, with  ease,  speed,  and  safety  is  the  first  and 
most  self-evident  of  the  achievements  of  the  rail- 
road. In  the  administration  and  regulation  of  this 
function  questions  have  arisen,  legislation  been 
framed,  and  experiments  made  during  nearly  thirty 
years,  but  with  small  beneficent  result.  In  the  mists 
of  the  discussion  thus  raised  the  "  railroad  problem  " 
has  ever  loomed  larger  and  more  distorted  than  it 
should  appear.  Primarily  the  railroad  is  based  upon 
certain  broad  and  immutable  principles  underlying 
the  commercial  and  industrial  system,  as  an  integral 
part  of  which  its  dependence  should  be  at  once  ap- 
parent. That  such  has  not  been  universally  recog- 
nized is  due  to  two  causes :  first,  few  people  except 
those  whose  interests  and  prejudices  have  moved 
them  strongly  either  to  one  side  or  the  other  have 
ever  investigated  the  matter  to  its  ultimate  conclu- 
sions ;  second,  the  railroad  system  itself,  in  the  strong 
throes  of  its  formative  period,  has  sometimes  seemed 
to  deny  its  manifest  destiny.  Unrestrained  and 
ruinous  competition,  reacting  upon  itself,  has  forced 


98 


rate  wars  and  discriminations,  confined  to  no  one 
locality  or  territory,  but  threatening  even  such  results 
as  the  diversion  of  the  nation's  commerce.  That 
this  period,  now  approaching  its  end,  should  give 
way  to  better  conditions  and  wiser  policies  is  as  in- 
evitable as  that  iron  rails  should  give  place  to  steel. 
Potent  as  the  railroad  is,  it  must  conform  to  rather 
than  make  conditions.  The  New  York  merchant 
will  trade  with  Chicago  if  transportation  rates  leave 
him  a  profit ;  if  they  do  not,  his  business  with 
Chicago  ceases,  and  the  carrier  loses.  From  this  it 
follows  that,  within  the  limits  of  a  just  and  reason- 
able freight  tariff,  the  equalizing  laws  of  trade  must 
determine  conditions  for  the  railroad.  With  this 
elementary  principle  in  mind,  the  "  railroad  prob- 
lem "  loses  many  of  its  difficulties ;  but  it  is  not  the 
purpose  of  this  article  to  discuss  this  question  further, 
except  as  its  effects  are  seen  in  tracing  the  history 
of  the  system's  development. 

The  first  railroad  commonly  claimed  to  have  been 
built  in  America  was  in  Massachusetts,  and  ran 
from  the  Quincy  granite  quarries  to  tide-water  at 
Neponset,  a  distance  of  three  miles.  It  was  com- 
pleted in  1826,  at  a  cost  of  $34,000.  Candor  com- 
pels the  statement  that  this  much-vaunted  bit  of 
road  was  neither  more  nor  less  than  an  ordinary 
tramway  for  horse-power,  such  as  had  been  common 
at  the  English  coal-mines  for  many  years  before  that 
time.  Waiving,  then,  the  claims  of  the  Quincy 
road,  as  well  as  those  of  the  Mauch  Chunk  switch- 
back road,  built  in  1827,  the  record  shows  the  first 
railroad  in  this  country  really  entitled  to  be  called 
such,  and  the  first  on  which  a  locomotive  was  actu- 
ally run,  to  have  been  the  Carbondale  Railroad, 
built  in  1828,  by  the  Delaware  and  Hudson  Canal 
Company,  from  their  coal-mines  to  Honesdale,  Pa., 
a  distance  of  sixteen  miles.  In  1829  a  locomotive 
built  in  England  from  the  plans  of  Horatio  Allen, 
an  American  engineer,  was  brought  over,  and  in 
August  commenced  running  regularly  on  this  road. 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


1'hat  locomotive,  called  the  Stourbridge  Lion,  was 
the  first  ever  used  in  the  United  States,  and  was 
imperfect  even  for  those  times.  The  multitubular- 
boiler  engines  which  succeeded  this  type  were  per- 
fected by  Stephenson,  and  the  Rocket,  the  first  of 
this  new  class,  was  successfully  tested  over  the  Rain- 
hill  track  in  the  same  year. 

The  Rocket  was  to  the  railroad  what  the  Clermont 
was  to  steam-navigation,  and  to  its  inventor,  as  to 
Fulton,  should  be  accorded  the  full  measure  of  glory 
for  the  achievement.  At  the  same  time,  in  this  case 
again,  as  in  that  of  Fulton,  the  idea  thus  perfected 
and  demonstrated  practicable  was  not  a  new  one. 
Little  known  as  the  fact  is  generally,  an  American 
was  the  first  to  conceive  the  locomotive  engine. 
His  name  was  Oliver  Evans,  and  in  Philadelphia 
he  perfected  in  1782  a  steam-carriage,  consisting  of 
a  high-pressure  engine  placed  on  wheels.  This 
machine,  when  exhibited  during  that  year,  was 
found  capable  of  running  a  mile  and  a  half  at  a 
single  stretch.  From  this  time  the  records  show  no 
further  attempts  in  this  direction  for  twenty  years, 
or  until  1802,  when  Richard  Trevethick,  an  English- 
man, patented  a  self-acting  steam-engine,  capable 
of  drawing  a  light  load  at  the  rate  of  five  miles  an 
hour.  Two  years  later  this  engine  was  put  in  use 
at  the  Merthyr-Tydvil  mines ;  and  the  demonstration 
in  1811,  by  Mr.  Blackett,  an  English  coal  propri- 
etor, that  weight  and  friction  would  suffice,  even 
with  smooth  wheels  and  rails,  to  render  the  steam- 
engine  self-motive  on  grades  or  with  heavy  loads, 
caused  the  further  introduction  of  short  lines  at  the 
mines.  The  final  triumph  in  locomotive  engineer- 
ing, and  the  one  which  made  possible  a  speed  and 
draft-power  of  practical  utility,  was  reserved  for 
George  Stephenson,  the  rough  and  unlettered  North- 
umbrian miner.  Passing  over  his  earlier  struggles 
and  partially  successful  models,  we  find  the  Rocket, 
in  1829,  standing  boldly  forth  as  the  alpha  of  the 
modern  railroad. 

The  first  American  locomotive  did  not  appear  for 
nearly  a  year  later,  and  was  but  a  diminutive  affair. 
It  was  called  the  Tom  Thumb,  and  its  inventor  was 
no  less  distinguished  a  personage  than  the  late  Peter 
Cooper.  The  boiler  of  the  Tom  Thumb,  although 
little  larger  than  that  of  an  ordinary  kitchen  range, 
was  provided  with  vertical  tubes,  thus  securing  the 
necessary  heating  surface  ;  but  the  waste-steam  blast 
of  Stephenson  was  replaced  by  a  primitive  bellows- 
like  contrivance  worked  by  a  drum,  with  a  belt 
which  passed  over  one  of  the  wheels  of  the  carriage. 
Notwithstanding  its  crudity,  this  little  locomotive, 
which  was  run  by  its  inventor  over  the  tracks  of 


the  Baltimore  and  Ohio,— then  operated  by  horse- 
power,—was  capable  of  a  very  fair  speed. 

Mr.  Cooper's  retirement  as  a  locomotive  engineer 
came  about  too  speedily,  however,  for  his  genius  in 
that  line  to  be  thoroughly  tested.  It  was  due  to  an 
amusing  circumstance,  which  caused  the  late  ven- 
erable philanthropist  much  mortification  for  many 
years.  While  out  with  a  party  of  friends  exhibiting 
the  Tom  Thumb,  Mr.  Cooper  met,  at  a  spot  where 
the  road  and  railroad  tracks  paralleled  each  other, 
the  proprietor  of  the  great  stage-coach  line  of  that 
part  of  the  country.  This  gentleman,  who  was 
waiting  with  one  of  his  fleetest  trotters,  proceeded 
to  demonstrate  the  superiority  of  horse-flesh  over 
steam.  He  would  scarcely  have  been  able  to  do 
this  but  for  a  mishap,  as  Mr.  Cooper  fired  up  his 
tiny  furnace  and  ran  steam  far  above  license  limits, 
while  the  diminutive  Tom  Thumb  trundled  along  at 
a  rate  that  after  the  first  quarter  was  placing  steam- 
power  well  in  the  lead.  Slowly  the  engineer-fire- 
man-inventor saw  his  engine  drawing  away  from 
the  wearied  horse,  and  victory  seemed  certain,  when 
suddenly  the  belt,  before  mentioned,  ran  off  the 
drum,  the  fires  slackened,  and  the  race  was  lost. 
Mr.  Cooper  felt  his  defeat  keenly. 

The  second  American  locomotive  was  built  at  the 
West  Point  Foundry  near  Cold  Spring,  N.  Y.  (where 
the  Parrott  guns  were  cast  during  the  War  of  the 
Rebellion),  after  plans  by  E.  L.  Miller,  and  was 
equipped  with  a  common  vertical  boiler.  Despite 
this  drawback,  this  locomotive,  which  was  called 
the  Best  Friend,  did  attain,  unattached,  a  speed  of 
thirty  to  thirty-five  miles  an  hour,  and  with  a  train 
of  five  cars  fifteen  to  twenty  miles.  This  locomo- 
tive was  built  for  the  South  Carolina  Railroad,  which 
ran  between  Charleston  and  Hamburg,  and  with  the 
consideration  of  which  is  fairly  begun  the  history  of 
American  railroads. 

On  the  fifteenth  day  of  January,  1831,  or  precisely 
four  months  after  that  memorable  day  when  George 
Stephenson,  standing  on  the  foot-board  of  the 
Northumbrian,  had  started  the  first  train,  on  board 
of  which  was  the  Duke  of  Wellington,  over  the 
Manchester  and  Liverpool  Railroad,  the  stockhold- 
ers of  the  South  Carolina  Railroad  celebrated  the 
first  anniversary  of  the  opening  of  their  road  by 
introducing  steam  motive  power.  The  Best  Friend 
was  the  locomotive,  and  by  means  of  it  a  train  of 
two  pleasure-cars,  carrying  a  band  and  150  stock- 
holders, together  with  a  specially  fitted  up  carriage 
bearing  a  detachment  of  United  States  troops  and 
a  field-piece,  went  down  the  road  on  a  grand  excur- 
sion. This  was  the  inauguration  of  the  passenger 


100 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


railroad  system  of  the  country,  and  it  followed  very 
closely,  as  can  be  seen,  upon  the  English  beginning 
made  by  the  Stockton  and  Darlington  road  in  1825. 
The  fact  that  the  road  was  a  year  old  before  steam 
was  introduced  illustrates  a  point  which  every  stu- 
dent of  American  railroads  has  had  brought  to  his 
attention  and  consideration,  viz.,  that  America,  as 
though  foreseeing  the  final  triumph  of  the  locomo- 
tive, commenced  her  railroads  some  time  before  this 
motive  power  was  developed.  As  an  example  of 
splendid  assurance,  the  action  of  this  same  South 
Carolina  Railroad  in  voting,  on  January  14,  1830, 
that  "  steam  "  should  be  the  only  motive  power  used 
on  the  road  stands  unequaled.  Other  roads  were 
similarly  forehanded  in  laying  their  tracks  in  antici- 
pation of  the  locomotive.  The  Baltimore  and  Ohio, 
begun  in  1828,  was  operating  by  horse-power  a  short 
stretch  of  road  fifteen  miles  long,  from  Baltimore  to 
Ellicott's  Mills,  in  1829,  and  carried  as  many  as 
80,000  passengers  and  6000  tons  of  freight  during 
the  year  1831.  A  year  later,  when  the  line  had 
been  extended  to  Frederick,  steam  was  introduced 
as  the  motive  power.  In  1831  the  South  Carolina 
Railroad  had  progressed  to  a  point  where  it  origi- 
nated the  four-wheel  car-truck,  and  had  replaced  the 
primitive  old  Best  Friend — which  had  unfortunately 
suffered  from  a  boiler  explosion  early  in  its  career — 
by  locomotives  of  more  improved  construction  and 
design.  In  connection  with  the  apprehension  caused 
by  the  bursting  boiler  a  curious  custom  developed 
on  this  road.  This  was  the  introduction  of  a  car 
loaded  with  several  bales  of  cotton,  and  known  as 
the  "barrier  car,"  between  the  locomotive  and  the 
passenger-cars.  Behind  this  the  early  Carolina 
traveler  felt  comparatively  safe. 

Among  others  of  the  very  early  roads  were  the 
Baltimore  and  Susquehanna,  dating  from  1 830  ;  the 
little  four-and-a-half-mile  line  between  New  Orleans 
and  Lake  Pontchartrain,  starting  the  same  year ;  the 
Boston  and  Lowell,  incorporated  in  1830;  the  Bos- 
ton and  Providence,  and  Boston  and  Worcester,  in- 
corporated in  1831  ;  and  the  Mohawk  and  Hudson, 
which  commenced  running  in  September,  1831. 
Of  all  the  early  roads  this  latter  is  probably  the  best 
known,  through  the  numerous  old  prints  that  have 
been  preserved  of  the  De  Witt  Clinton  puffing  along, 
with  a  train  of  most  extraordinary  cars  in  the  rear. 
These  were  nothing  more  or  less  than  ordinary 
stage-coach  bodies  mounted  on  trucks,  coupled  to- 
gether with  chains.  The  track  consisted  almost 
universally  of  wooden  rails,  laid  upon  stone  or  tim- 
ber ties,  and  having  an  iron  bar  or  "  strap,"  of  from 
one  half  to  five  eighths  of  an  inch  in  thickness, 


spiked  along  the  top  on  its  inner  edge,  on  which  the 
wheels  ran.  The  early  American  locomotive  engine, 
of  which  the  De  Witt  Clinton  may  fairly  be  said  to 
be  typical,  was  a  small,  rather  rickety  affair,  weigh- 
ing from  three  to  three  and  one  half  tons,  with  a 
detached  tender  carrying  pitch-pine  for  fuel,  and 
capable,  when  driven,  of  making  thirty  miles  an 
hour.  The  spark-arrester  for  smoke-stacks  was  un- 
known, and  outside  passengers  escaped  lightly  if 
their  clothing  caught  fire  no  oftener  than  once  or 
twice  during  a  trip. 

The  English  locomotives  built  by  George  and 
Robert  Stephenson  at  Newcastle-on-Tyne  were 
heavier  and  better  machines.  The  first  of  these, 
brought  here  before  the  Rocket  model  had  been 
perfected,  was  landed  at  New  York  in  1829,  and 
set  up  in  an  iron-yard  on  the  East  River,  where  it 
was  exhibited  as  one  of  the  mechanical  marvels  of 
the  time.  This  engine,  however,  was  little,  if  any, 
better  than  the  home-made  ones ;  but  in  1 83 1  there 
was  imported  another  of  the  improved  models, 
which  weighed  seven  tons,  and  was  considered  a 
most  powerful  machine.  This  engine  was  for  the 
Mohawk  and  Hudson  road,  and  cost  when  deliv- 
ered, with  all  charges  paid,  $4869.59.  Its  general 
appearance  and  effectiveness  will  be  easily  imagined 
by  those  who  saw  at  the  World's  Fair  at  Chicago 
the  famous  old  Johnny  Bull,  of  the  Camden  and 
Amboy  line,  of  historic  memory.  This  engine,  a 
great  machine  in  its  day,  was  landed  at  Philadelphia 
in  August,  1831. 

Almost  the  first  improvement  made  by  American 
engineers  upon  the  English  models  was  the  intro- 
duction of  the  swivel  fore-end  truck,  suggested  in 
1831  by  Horatio  Allen,  of  the  South  Carolina  Rail- 
road, but  first  perfected  and  adopted  by  John  B. 
Jervis  on  the  Mohawk  and  Hudson  road,  in  the 
same  year.  This  change,  so  absolutely  necessary  in 
a  country  where  railroad  companies  had  neither 
money  nor  time  to  spend  in  avoiding  heavy  gradi- 
ents and  sharp  curves,  gave  the  American  machines 
an  advantage  over  the  rigid  English  locomotive 
which  they  have  ever  since  maintained.  Even  to- 
day a  billiard-table  road-bed  is  essential  in  obtaining 
good  results  from  machines  of  English  make.  The 
equalizing-lever,  patented  by  Joseph  Harrison,  Jr., 
of  Philadelphia,  was  the  second  improvement,  and 
was  absolutely  demanded  by  the  rough-and-ready 
nature  of  the  work  required  on  American  railroads. 
It  gave  greatly  increased  stability,  and  lessened  to  a 
large  extent  the  danger  of  derailment.  The  idea  of 
two  pairs  of  driving-wheels  was  patented  in  1 836  by 
Henry  R.  Campbell. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCK 


101 


The  railroads  of  the  country  were  growing,  mean- 
while, and  those  already  mentioned  and  a  few  others 
were  either  undertaken  or  in  view  within  twelve 
months  of  the  day  that  the  Best  Friend  pulled  the 
first  passenger-train  out  of  the  Line  Street  station  in 
Charleston.  In  1830  there  were  but  23  miles  of 
railroad  in  operation  in  the  United  States.  Within 
a  year  this  had  been  increased  to  95,  and  a  year 
later  still  to  229 — a  wonderful  record,  considering 
the  undeveloped  resources  of  the  country  at  that 
time.  It  cannot  be  claimed  that  these  railroads 
were  such  as  to  compare  even  distantly  with  those 
in  England.  They  were  but  primitive  constructions 
at  the  best,  cheaply  built,  poorly  equipped,  faultily 
designed,  and,  briefly,  such  only  as  a  young  country 
commanding  the  crudest  of  mechanical  appliances 
could  produce.  Then,  as  in  later  times,  it  was  the 
practice  of  railroad  managers  to  construct  their  lines 
as  quickly  and  as  cheaply  as  possible,  leaving  their 
improvement  to  the  future,  when  its  necessity  should 
have  been  demonstrated,  and  the  expense  could  be 
borne  by  the  earnings  and  surplus  funds.  This  pol- 
icy, avoiding  enormous  initial  outlay,  is  still  working 
itself  out,  as  has  been  seen  so  plainly  of  late  years 
in  the  gigantic  undertakings  by  which  the  Pennsyl- 
vania road  is  straightening  its  crooked  course,  and 
the  New  York,  New  Haven,  and  Hartford  is  obvi- 
ating highway  crossings  at  grade.  In  England,  on 
the  contrary,  construction  has  always  proceeded 
upon  a  different  plan.  Heedless  of  obstacles,  re- 
gardless of  expense,  and  careless  of  time,  engineers 
have  gone  slowly  forward.  Had  Edinburgh  and 
London  been  as  far  apart  as  New  York  and  San 
Francisco,  they  might  not  yet  have  had  a  rail  con- 
nection. The  Manchester  and  Liverpool,  the  second 
English  railroad  opened,  well  illustrates  this.  It 
approached  very  nearly  to  those  attainments  of 
engineering  skill  which  characterize  construction  to- 
day. George  Stephenson,  who  had  invented  the 
locomotive,  also  carried  out  the  building  of  its  path- 
way ;  and  in  this  road,  with  its  underground  tunnel, 
high  embankments,  deep  cuttings,  lofty  viaduct,  and 
buoyed  road-bed  across  the  quaking  bogs  of  Chat- 
moss,  he  achieved  a  distinction  as  an  engineer  that 
was  second  only  to  the  greater  glory  of  his  mechan- 
ical inventions. 

America,  slow  though  she  necessarily  was  at  first 
in  developing  the  resources  which  were  essential  to 
perfect  railroad  construction  and  equipment,  was 
behind  no  nation  in  her  realization  of  the  economic 
value  of  this  new  method  of  transportation.  Her 
initial  crudity,  even  if  the  circumstances  of  the  time 
did  not  sufficiently  excuse  it,  may  perhaps  be  par- 


doned when  it  is  considered  what  sacrifices  the  pro- 
prietors have  made  in  later  years  in  order  to  overtake 
and  outstrip  every  other  nation  on  the  face  of  the 
earth.  The  American  railway  system  stands  forth 
to-day  as  the  most  stupendous  and  progressive,  and 
among  the  most  perfect,  in  the  world.  But  this  is 
outrunning  history.  Sixty-five  years  ago,  the  great 
mass  of  the  people  never  dreamed,  wonderful  as  they 
believed  the  railroad  to  be,  of  the  extended  achieve- 
ments of  to-day.  Only  by  a  few  men  of  great 
minds  was  the  true  significance  of  this  new  factor  in 
affairs  properly  appreciated.  Long  after  the  excite- 
ment and  novelty  attending  the  opening  of  a  new 
road  or  the  trial  of  a  new  locomotive  had  worn  off 
through  the  very  frequency  of  its  occurrence,  they 
were  planning  and  working  toward  great  ends. 
They  saw  that  the  canal  system  must  give  way  be- 
fore the  new  force  as  soon  as  the  public  needs 
demanded  that  speed  and  convenience  should 
replace  the  old-time  delays  and  discomforts.  With 
it  all,  the  men  who  had  made  New  York  the  great 
commercial  center  of  the  country,  and  who,  down 
the  long  Erie  Canal  and  the  broad  waterway  of  the 
Hudson,  had  led  to  their  city  the  produce  of  the 
great  central  and  lake  region,  then  known  as  the 
West,  saw  their  commercial  supremacy  menaced. 
Nor  did  they  realize  the  danger  more  quickly  than 
did  the  enterprising  spirits  of  the  other  great  rival 
seaports — Boston,  Philadelphia,  and  Baltimore — 
recognize  their  opportunities.  The  Erie  Canal, 
striking  to  the  very  heart  of  the  continent  on  the 
line  of  least  elevation  above  tide-water,  had  settled 
the  question,  until  then  contested,  as  to  which  of  the 
great  Eastern  cities  should  become  the  national  port 
of  entry  and  distributing  center.  Away  down  in 
New  Orleans,  reaching  up  with  the  long  arm  of  the 
Mississippi,  as  well  as  in  all  the  Atlantic  seaports, 
had  been  felt  the  diversion  of  the  stream  of  Western 
trade ;  and  it  was,  in  fact,  the  effort  to  recover  this 
lost  ground  that  caused  one  of  the  earliest  of  the 
railroads,  the  great  trunk-line  of  the  Baltimore  and 
Ohio,  to  be  projected.  Between  Baltimore  and  her 
hopes,  however,  stretched  the  rough  barrier  of  the 
Alleghanies,  and  the  engineering  skill  of  those  days 
was  scarcely  sufficient  to  compass  all  at  once  this 
difficulty.  Philadelphia,  too,  actuated  by  the  same 
motive  and  attempting  reprisal  by  the  same  means, 
found  herself  balked  by  the  same  great  wall.  Still, 
these  delays  were  recognized  as  being  only  tempo- 
rary, and  already,  by  1835,  Boston  was  seen  to  be 
reaching  out  over  the  Boston  and  Worcester  to  cross 
the  previously  supposed  insuperable  barrier  of  the 
Berkshire  Hills  and  enter  Albany.  This,  we  know, 


102 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


was  accomplished  in  1841 ;  but  long  before  that 
time,  in  1836,  the  great  trunk-line  of  the  Erie  Rail- 
way was  commenced,  and  the  foundation  laid  for 
New  York's  greatness  as  a  railroad  center.  The 
completion  of  this  road  to  Dunkirk  in  1851,  and  its 
opening  for  through  traffic,  marks  the  inauguration 
of  the  trunk-line  system. 

Another  great  railroad  power,  active  during  all 
the  earlier  period  in  behalf  of  New  York,  was  the 
New  York  Central,  which  was  formed  in  1853  by 
the  consolidation  of  five  small  railways.  This  shows 
how,  before  its  future  great  president,  Commodore 
Vanderbilt,  entered  on  his  successful  career  as  a 
manager,  others  appreciated  the  axiom  that  compe- 
tition among  railroads  cannot  exist  where  combina- 
tion is  possible.  Commodore  Vanderbilt  was,  how- 
ever, well  known  before  that  as  an  important  factor 
in  the  business  of  conducting  transportation.  In 
the  very  earliest  days  of  railroads,  when  the  Boston 
and  Providence,  in  1835,  established  the  first  link  in 
the  rail  connection  between  New  York  and  Boston, 
his  steamboats  afforded  the  complementary  trans- 
portation. It  would  be  far  too  tedious,  and  require 
too  great  a  space,  to  trace  in  detail  the  fortunes  of 
the  American  railroads  through  the  disconnected 
links  of  short  lines  which  began  in  1831  to  spring 
up  all  over  the  country.  As  an  evidence  of  the 
number  and  comparative  insignificance  of  these 
roads,  it  can  be  stated  that  in  1832,  when  the  total 
mileage  of  the  country  was  only  229,  there  were  no 
less  than  sixty-seven  separate  railroad  companies  in 
the  State  of  Pennsylvania  alone.  In  this  multiplic- 
ity of  beginnings  a  general  idea  of  the  growth  of 
the  railroads  of  the  United  States  can  best  be  derived 
from  the  following  figures,  which  give  the  total  mile- 
age of  the  country  by  demi-decades  from  1830 : 


MILES  OF  RAILROAD  IN  OPERATION  FROM 

1830  TO    1894. 
YEAR. 
1830   


1840 

1845 
1850 
1855 

1865 
1870 

1875 
1886 
I885 


MILES  IN 
OPERATION. 

23 

1,098 
2,818 
4.633 

9,021 

'8,374 
30,626 


52,922 
74,096 
93.296 
128,361 


, 
"890  ....................................     166,706 

9'  ................................  -•  .....      170,795 


.....................................     174,750 

'°93  ......................................     170,607 

l894  ......................................      I7544I 

Omitting  for  the  present  the  consideration  of  the 
later  figures,  the  proportionate  importance  of  the 


early  increase  as  expressed  in  percentages  is  seen 
at  once.  From  1835,  when  the  first  1000  miles  of 
railroad  were  in  operation,  the  increase  for  each 
established  period  of  five  years  varies  but  little  from 
one  hundred  per  cent,  until  the  time  of  the  Civil  War. 
With  the  railroads  of  the  country  thus  doubling  twice 
in  every  ten  years,  it  is  easy  to  understand  that  condi- 
tions must  have  been  more  or  less  chaotic  so  far  as 
rates  and  facilities  were  concerned.  Towns  reached 
only  by  a  long,  tiresome,  and  expensive  wagon-ride 
one  year  were  placed  in  close  communication  with 
the  outside  world  the  next.  The  communication 
naturally  established  trade  relations ;  a  new  market 
and  a  new  source  of  supply  were  concurrently 
developed,  and  the  effect  could  not  be  anything 
but  stimulating  to  the  industrial  condition  of  the 
country. 

There  was  much  unevenness  in  this  early  develop- 
ment, however,  and  much  inequality  ;  not  only  was 
one  town  favored  at  the  expense  of  another,  but 
even  the  favored  ones  found  themselves  confined 
within  the  limits  of  a  system  that  was  ignorant  of 
coterminous  facilities,  and  jealous  to  an  extreme 
degree  of  joint  traffic.  In  such  conditions,  there- 
fore, it  was  some  time  before  the  many  links  began 
to  realize  that  they  were  but  part  of  what  must 
eventually  be  a  great  chain.  It  was  not  until  so 
late  as  1860  that  the  railroad  chain  was  complete 
and  continuous  along  the  Atlantic  coast  and  to  the 
South,  and  that  Bangor,  Me.,  and  New  Orleans 
were  at  last  at  the  ends  of  a  connecting  system. 

In  the  West,  prior  to  1850,  there  were,  broadly 
speaking,  no  railroads.  The  first  ones  to  be  built 
on  the  farther  side  of  the  Alleghanies  were,  singu- 
larly enough,  in  the  extreme  Southern  States  of 
Louisiana  and  Mississippi.  These  roads  were  the 
Clinton  and  Port  Hudson,  incorporated  in  1833, 
and  the  Bayou  Sara  and  Woodville  road,  incorpo- 
rated as  the  West  Feliciana  Railroad  Company  in 
1831.  They  were  operating  before  1840,  and  have 
continued  ever  since,  enjoying  the  distinction  of 
being  the  pioneer  Western  railroads.  For  ten  years 
thereafter  no  new  ones  entered  the  field,  but  by  the 
middle  of  the  next  decade  a  network  of  them  was 
stretching  across  the  face  of  the  great  central  region. 
A  system  of  land  grants  did  much  to  foster  this 
growth  in  the  West.  The  general  government 
allotted  certain  alternate  sections  of  the  public  lands 
to  the  several  States  in  the  West,  and  these  States 
ceded  them  under  certain  conditions,  in  the  nature 
of  a  subsidy,  to  the  railroads.  The  Illinois  Central 
and  the  Mobile  and  Ohio  were  the  first  railroad 
corporations  to  gain  the  advantage  of  these  grants. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


It  was  during  this  period  that  the  far-reaching 
effects  of  the  railroads  began  to  be  appreciated  in 
the  fuller  significance  to  which  their  extension  has 
brought  them  to-day. 

The  intervention  of  the  five  years  of  war  and 
turmoil  which  came  coincidently  with  this  realization 
prevented  the  immediate  carrying  out  of  the  plans 
then  formed.  Nevertheless  men  were  planning  all 
through  that  dark  and  disturbed  time,  laying  the 
foundations  of  those  gigantic  undertakings  the  be- 
ginnings of  which  were  made  almost  before  the 
dawn  of  peace  at  Appomattox  was  saddened  by  the 
death  of  Lincoln.  By  1866  the  spirit  of  railroad 
extension  was  spinning  the  shining  network  of  its 
rails  throughout  the  land;  by  1869  it  reached 
dimensions  wonderful  to  behold,  8000  miles  in  each 
of  the  two  succeeding  years  being  the  rate  of  in- 
crease. Profits  satisfying  the  grasping  hopes  of 
avarice  beckoned  capital  on,  and,  with  small  regard 
for  consequences  to  themselves,  the  railroad  man- 
agers plunged  recklessly  into  competition.  Existing 
lines  were  paralleled ;  territories  already  covered  by 
one  system  were  invaded  by  rivals,  and  the  great 
war  of  competition  began  in  earnest. 

This  weakness  of  unlimited  competition,  coupled 
with  the  extreme  sensitiveness  of  the  railroad  to 
industrial  and  commercial  changes,  found  it  more 
than  vulnerable  when  the  crash  of  1873  came  upon 
the  country.  In  view  of  the  disastrous  consequences 
of  the  failure  of  Jay  Cooke  &  Company,  in  the 
troubles  of  that  time,  the  railroad  may  fairly  be  said 
to  have  aided  in  bringing  about  its  own  decline, 
since  it  was  in  attempting  to  carry  singly  the  enor- 
mous financial  burden  of  the  Northern  Pacific  con- 
struction that  this  great  house  went  under.  Within 
the  next  two  years  railroad  increase  dropped  off 
seventy-five  per  cent.  Then,  responding  to  improved 
conditions,  it  started  again  on  the  wonderful  career 
which  ended  early  in  the  eighties,  when  enterprise, 
having  overdone  itself  in  such  follies  as  the  Nickel 
Plate  and  the  West  Shore  bubbles,  fell  from  sheer  ex- 
haustion. Recovering  therefrom  within  the  short 
space  of  three  years,  a  fresh  start  was  taken,  at  a 
pace  that  placed  the  record  for  annual  railroad 
extension  at  nearly  13,000  miles.  This  was  between 
1886  and  1887,  and  was  followed  by  a  normal 
growth  lasting  until  the  financial  troubles  and  indus- 
trial depression  of  1893,  when  for  the  first  time  in 
the  history  of  railroads  in  the  United  States  the 
number  of  miles  of  road  operated  decreased.  The 
discussion  of  this  phase  of  the  subject,  bringing  us 
as  it  does  to  the  present  time,  will  properly  come 
later.  Reverting,  then,  to  the  period  immediately 


103 

following  1869,  extending,  with  the  brief  interrup- 
tion already  noted,  to  1883,  we  find  an  idea  of  the 
pace  at  which  the  great  systems  of  the  country  were 
evolving  in  the  figures  for  the  single  decade  between 
1869  and  1879. 

INCREASE  OF  SELECTED  SYSTEMS,  1869  TO  1879. 


NAME  or  ROAD. 

MILEAGE 
.869. 

MILEAGE, 

1879. 

Pennsylvania  R.  R.  .  .  . 

c?8 

N.  Y.  Central  and  H.  R.  R.  . 

53° 

4,000 

Chicago  and  Northwestern  
Chicago,  Milwaukee,  and  St.  Paul  .  .  . 

>yj 
1,150 

839 

2,158 
2,250 

This  increase  is  not,  of  course,  to  be  set  down 
wholly  to  structural  extension,  which  was  in  fact 
but  one  factor  in  the  growth,  and  scarcely  more 
important  than  several  others.  Consolidation,  or 
acquirement  by  lease  or  purchase,  has  much  to  do 
with  the  formation  of  great  lines.  This  policy  was 
undoubtedly  based  in  its  conception  upon  the  falla- 
cious idea,  generally  held  by  railroad  managers  at 
that  time,  that  it  was  possible  for  a  road,  by  exclu- 
sive control  of  territories,  to  obtain  advantages  in 
the  dictation  of  rates  and  facilities  that  would  enable 
it  to  maintain  itself  upon  the  arbitrary  basis  of 
charging  "  all  that  the  traffic  will  bear."  Under- 
taken in  this  spirit,  however,  the  great  systems, 
coming  to  understand  more  fully  the  limitations  of 
their  power,  have  applied  themselves  to  the  problem 
as  it  actually  exists,  and  in  the  constantly  decreasing 
rates  of  transportation,  made  possible  by  the  econo- 
mies of  concentration  and  latter-day  improvements, 
they  have  given  that  stimulation  to  trade  which  is 
at  once  the  encouragement  of  the  merchant  and  the 
advantage  of  the  carrier.  To  illustrate  the  growth 
that  has  resulted,  the  increased  mileage  of  the  fol- 
lowing large  systems  in  the  period  from  1883  to 
1894  is  given: 

GROWTH  OF  SELECTED  SYSTEMS,  1883  TO  1894. 


NAME  op  ROAD. 

MILEAGE, 
1883. 

MILEAGE, 
1894. 

Atchison,  Topeka,  and  Santa  F6  
Baltimore  and  Ohio  

2,510 
I  SCA 

9.345 

Central  Pacific  

ZjyO/ 
I  -12X 

Chicago,  Burlington,  and  Quincy  .... 
Chicago,  Rock  Island,  and  Pacific  
Illinois  Central  

3.322 
1,38" 

I  Q27 

5.73° 
3-572 

Lake  Shore  and  Michigan  Southern  .  . 
New  York,  Lake  Erie,  and  Western  . 
Northern  Pacific  

1.339 
1,025 

U4B 

1476 
2,001 

4.4C7 

Southern  Pacific  

ooo 

6,1" 

Union  Pacific.  

1,820 

4.46Q 

104 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


Sketching  thus  in  outline  the  history  of  the  rail- 
roads down  to  recent  times,  one  branch  of  the  sub- 
ject has  been  omitted  until  the  last  in  order  that  its 
importance  might  have  the  full  consideration  that  it 
deserves.  This  is  the  transcontinental  system.  Its 
conception,  its  accomplishment,  and  its  development 
are  the  glory  of  American  genius,  and  its  union  of 
the  most  distant  bounds  of  this  great  nation  the 
bond  which  makes  one  in  material  fact  a  nation 
that  must  ever  be  one  in  sentiment  and  purpose. 
So  early  as  April  i,  1850,  there  met  at  Philadelphia 
a  convention  called  to  discuss  the  feasibility  of  a 
railroad  to  the  Pacific  coast.  The  discovery  of  the 
California  gold-fields,  and  the  rush  thither  in  the 
years  preceding,  had  turned  men's  minds  as  they 
had  never  been  turned  before  toward  that  wonder- 
ful country  so  lately  won  from  Mexico  by  the 
aggressive  patriotism  of  Commodore  Shubrick. 
From  a  little-known  region  where  traders  bartered 
for  hides  with  the  indolent  and  suspicious  Mexicans, 
California  had  become  the  El  Dorado  where  hun- 
dreds of  thousands  longed  to  go,  and  thousands 
already  there  clamored  for  the  supplies  the  East 
would  so  willingly  have  furnished  them.  But  there 
were  no  means  of  getting  there  except  by  the  long 
sea-voyage,  either  crossing  the  Isthmus  or  around 
Cape  Horn,  or  by  the  equally  slow  and  far  more 
perilous  voyage  in  the  prairie-schooner  across  the 
plains  and  mountains,  where  hostile  Indians,  starva- 
tion, thirst, — every  danger,  in  short,  that  an  unknown 
and  arid  land  could  offer, — awaited  the  traveler. 
Could  a  railroad  but  be  built,  these  gentlemen  who 
gathered  at  Philadelphia  in  1850  felt  how  great 
would  be  its  achievement  and  how  instant  its  suc- 
cess. They  were  ahead  of  their  time,  however,  and 
the  project  was  too  vast  for  immediate  acceptance. 
Man  had  not  then  become  accustomed  to  working 
miracles,  as  he  has  in  these  days,  when  no  project 
is  too  immense  or  chimerical  to  have  its  stock  sub- 
scribed for  at  some  figure.  Accordingly  nothing 
was  done  beyond  the  mere  exploiting  of  a  great 
idea ;  but  perhaps  that  was  the  best  thing  that  could 
have  been  done,  inasmuch  as  it  familiarized  men's 
minds  to  the  contemplation  of  the  thing  as  possible. 
The  second  great  step  in  the  preliminary  endeavors 
toward  transcontinental  railways  was  made  during 
the  administration  of  President  Pierce.  The  War 
Department,  at  whose  head  was  Jefferson  Davis, 
organized  and  carried  out  a  great  survey,  laying  out 
several  railroad  routes  across  the  continent.  The 
report  of  these  governmental  engineers  still  further 
interested  the  country  in  the  subject. 

The  idea  first  enunciated  in   1850  was  twenty 


years  in  coming  to  its  full  fruition.  The  conditions 
caused  by  the  war,  and  the  necessity,  more  strongly 
felt  than  ever,  for  close  communication  with  the 
great  Western  regions  and  the  Pacific  slope,  were 
powerful  motive  forces  in  the  direction  of  such  an 
undertaking.  California  had  built  her  first  railroad 
in  1856,  and  was  as  eager  to  reach  the  Atlantic  as 
the  Eastern  States  were  to  arrive  at  the  Golden 
Gate.  With  a  united  sentiment  in  its  favor,  and  a 
government  ready  to  aid  by  every  means  in  its 
power,  the  stupendous  project  was  inaugurated  on 
July  i,  1862,  by  the  incorporation  by  Congress  of 
the  Union  Pacific,  which  in  its  junction,  seven  years 
later,  with  the  Central  Pacific  near  Ogden,  Utah, 
completed  the  first  railroad  line  across  this  or  any 
continent.  The  government,  as  its  share  in  the 
undertaking,  granted  subsidies  of  enormous  value. 
To  the  Union  Pacific — the  main  line  of  which  ran 
from  Omaha,  a  straggling  frontier  town,  to  Ogden, 
Utah,  a  distance  of  1033  miles — was  granted  a  sub- 
sidy in  bonds  of  $16,000  per  mile  from  the  Missis- 
sippi River  to  the  base  of  the  Rockies.  Across  this 
almost  impassable  barrier  the  amount  was  raised  to 
$48,000  per  mile,  and  between  there  and  the  Sierras 
lowered  again  to  $32,000  per  mile.  In  all,  1038 
miles  were  subsidized,  at  an  expense  to  the  govern- 
ment in  bonded  indebtedness  of  $27,236,512.  In 
addition  to  this  the  company  was  granted,  subject 
to  securing  patent,  no  less  than  12,000,000  acres  of 
land. 

The  Central  Pacific,  in  its  turn,  with  a  subsidized 
mileage  of  737,  cost  the  government  in  bonds  issued 
$25,885,120,  and  received  land  grants  amounting  to 
90,000,000  acres.  The  first  rail  on  the  Union 
Pacific  was  laid  in  July,  1865,  and  between  then 
and  May  15,  1869,  when  the  junction  with  the 
Central  Pacific  was  finally  made,  the  work  was  car- 
ried on  amid  difficulties  such  as  can  scarcely  be 
understood  to-day.  Surveying  parties,  cut  off  by 
Indians,  perished  miserably;  construction  camps 
harassed,  stock  driven  off,  stragglers  cut  down 
almost  within  hearing  of  the  clicking  picks  and  strik- 
ing shovels ;  constant  alarms  and  wearying  watch- 
fulness— all  these  things  made  up  the  price  which 
the  white  man  paid  the  Indian  for  passage  across 
his  lands.  Nor  were  these  the  only  difficulties. 
Nature  herself  opposed  her  most  formidable  front 
to  the  invaders  of  her  solitudes — deserts  parched  and 
alkaline,  rivers  rock-walled  and  turbulent,  valleys  to 
be  crossed,  hills  to  be  cut  down,  mountains  to  be 
wound  about  in  snake-like,  tortuous  curves.  Now 
clinging  to  the  side  of  a  sheer  precipice,  now  span- 
ning a  fathomless  chasm,  now  diving  beneath  some 


STUYVESANT  FISH. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


109 


huge  spur  barring  the  way  across  the  everlasting 
heights,  slowly  the  twin  threads  of  steel  crept  on. 
Men  who  had  shriveled  with  fever  on  the  sun-baked 
levels  shivered  with  the  deadly  cold  on  the  cloud-girt 
heights,  and  hundreds  fell.  But  the  Rockies  were 
crossed  at  last;  to  an  altitude  of  8205  feet  above 
sea-level  the  long  roadway  climbed,  falling  thence 
slowly  to  the  plateau  beyond.  It  was  the  greatest 
engineering  feat  man  had  ever  achieved,  and  marks 
an  epoch  in  the  progress  which  there  began  to 
stretch  beyond  the  accepted  bounds  of  human  lim- 
itation. The  Central  Pacific  crossed  the  Sierras  in 
a  similar  manner  at  an  altitude  of  7042  feet,  and 
dragged  for  hundreds  of  miles  through  the  Hum- 
boldt  Desert,  and  the  work  was  done.  There  is  no 
need  to  enlarge  upon  the  importance  of  what  is  self- 
evident.  The  correlation  of  Occidental  development 
and  Eastern  prosperity  is  too  well  understood  to 
require  demonstration,  and  even  if  it  were  not,  the 
results  which  the  brief  quarter  of  a  century  of  trans- 
continental communication  has  effected  speak  far 
beyond  the  power  of  either  words  or  figures. 

Others  of  the  early  transcontinental  lines  speedily 
followed  on  the  commencement  just  related.  Long 
before  the  first  through  train  from  East  to  West  was 
run,  new  companies  had  been  chartered,  and  long 
construction  trains,  laying  their  roads  before  them  as 
they  went,  were  crawling  across  the  continent.  The 
Northern  Pacific,  chartered  in  1864,  was  organized  to 
construct  a  line  from  Lake  Superior  to  Puget  Sound, 
a  distance  of  1800  miles,  with  a  branch  200  miles 
in  length  to  Portland,  Ore.  The  land  grants  ob- 
tained by  this  company  aggregated  47,000,000  acres. 
The  Atlantic  and  Pacific  Railroad,  chartered  in 
1866,  obtained  grants  of  land  based  on  mileage; 
12,800  acres  being  allowed  per  mile  in  the  States, 
and  25,600  acres  per  mile  in  the  Territories.  This 
line  in  connection  with  the  Atchison,  Topeka,  and 
Santa  F6,  and  the  St.  Louis  and  San  Francisco 
Railway,  made  practically  two  routes  across  the 
continent.  The  Texas  Pacific,  which  was  incorpo- 
rated in  1871  to  extend  from  New  Orleans  to  Sierra 
Blanca,  a  distance  of  1068  miles,  joined  there  the 
Southern  Pacific,  which  ran  to  San  Francisco,  and 
the  rail  connection  was  opened  on  October  15, 
1882,  thus  perfecting  the  union  of  the  Pacific  coast 
with  the  country  at  large,  and  more  fully  binding  it 
in  the  following  year  by  the  further  junction  of  the 
Southern  Pacific  with  the  Galveston,  Harrisburg, 
and  San  Antonio  road  to  the  Gulf. 

It  would  be  impossible  to  trace  further,  even  if 
space  allowed,  the  progress  in  detail  of  that  most 
complicated  organism,  the  American  railroad  system, 


toward  its  present  condition.  By  just  what  steps 
the  advance,  undeniably  making  toward  homogene- 
ity and  a  concentration  of  control,  is  to  be  brought 
about  is  a  question  hard  to  answer,  and  admitting 
of  explanation  based  on  varying  opinions.  It  is 
unquestionable  that  this  potent  force  steadily  work- 
ing  is  the  one  in  which  the  final  solution  of  the  so- 
called  "  railroad  problem  "  will  be  found.  It  is  a 
power  best  observed  in  the  results  following  its 
manifestations  as  railroad  history  knows  them,  and 
therefore  best  studied  in  the  abstract  rather  than  in 
the  detailed  enumeration  of  the  absorption  by  the 
XX  line  of  the  YZ  road,  and  so  on  through  all  the 
permutations  of  railroad  evolution. 

The  constructive  period  of  the  railroad  in  the 
United  States  may  be  said  to  have  ended  in  1869, 
assuming  our  definition  of  this  period  as  that  during 
which  extension  was  purely  on  legitimate  lines,  with 
new  fields  for  all,  and  non-competing  roads  the  rule. 
This  period,  being  naturally  one  of  great  prosperity 
for  existing  lines,  became  through  this  very  reason 
the  cause  of  their  own  undoing.  It  showed  men 
where  money  was  to  be  made,  and  regardless  of  the 
fact  that  where  one  man  may  live  in  plenty  two 
men  may  find  but  scanty  rations,  and  four  men 
starve,  they  rushed  into  the  new  field.  Thus  was 
inaugurated,  almost  imperceptibly  at  first,  but  more 
and  more  impetuously  as  it  went  on,  the  era  of  un- 
checked competition,  through  which  it  seems  to  have 
been  necessary  that  the  railroads  should  pass.  The 
very  swiftness  with  which  it  came  on  only  aggra- 
vated the  distemper.  Industrial  and  commercial 
conditions  found  it  impossible  to  keep  up  with  the 
facilities  that  the  railroads  were  offering.  Manufac- 
tories were  only  producing  such  an  amount  as  trade 
demanded,  and  trade,  in  its  turn,  was  only  of  such 
volume  as  consumption,  regulated  by  existing  con- 
ditions, required.  In  the  handling  of  this  internal 
commerce,  transportation  facilities  as  they  then 
existed  sufficed. 

Into  this  seemingly  well-balanced  order  was  sud- 
denly injected  the  new  element  of  vastly  increased 
transportation  capacities.  Competitors  built  rival 
roads  side  by  side  with  the  old  ones,  and  tapped 
from  opposing  sides  the  tributary  territories.  Then, 
that  they  might  secure  business,  rates  were  lowered 
and  the  war  fairly  begun.  Where  one  railroad  had 
been  able  to  handle  the  traffic  of  a  given  section, 
two  now  divided  between  them  the  same  traffic. 
Commerce  could  not  double  itself  at  a  bound;  it 
had  to  grow.  Furthermore,  it  saw  its  advantage  in 
this  struggle  of  the  railroads,  and  so  in  turn  crowded 
each  of  the  competitors  to  a  fresh  concession,  which 


100 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


was  at  once  used  as  the  lever  to  screw  down  again 
the  rival.  This  state  of  affairs  could  not  last,  and 
its  effects  were  soon  seen  in  the  bankrupt  roads  that 
began  to  appear.  These  only  brought  a  fresh  com- 
plication to  a  condition  of  affairs  that  was  fast  be- 
coming alarming  to  the  longer  heads  who  were 
managing  the  great  lines.  Thus  was  demonstrated 
the  fallacy  that  competition,  free  and  untrammeled, 
could  work  no  evil.  With  nothing  in  their  treasuries 
and  profit  earning  impossible,  the  only  resource  of 
the  bankrupt  roads  was  to  secure  business  at  any 
price  in  order  to  live,  and  they  did  it,  and  kept  on, 
while  the  solvent  lines  became  poorer. 

From  such  a  state  of  affairs  there  was  but  one 
issue — natural,  but  distasteful  to  a  degree  to  men 
who  were  jealous  of  their  company's  exclusive  sov- 
ereignty, even  to  the  extent  of  refusing  joint  traffic. 
This  issue  was  combination,  and  the  lukewarm 
manner  of  its  early  adoption  made  it  but  a  poor 
remedy.  Furthermore,  the  public,  ever  ready  to 
view  with  alarm  the  harmony  of  great  interests,  saw 
in  this  only  a  gigantic  scheme  of  the  railroads  to 
monopolize  power.  The  very  men  and  communi- 
ties who  had  thrived  by  the  discriminations  forced 
by  a  fierce  competition  were  loudest  in  protesting 
when  a  more  equitable  adjustment  was  proposed. 
Towns  fifty  miles  apart  and  connected  by  two  or 
more  roads  could  exchange  their  goods  at  a  less  rate 
of  freight  than  was  paid  by  the  shipper  in  the  small 
half-way  town  who  had  only  one  road  to  depend 
upon.  By  such  a  system  as  this  the  railroad  man- 
agers sought  compensation  for  the  slaughter  of  rates, 
and  the  secretly  favored  shippers  acquiesced  silently. 
From  those  who  paid  full  rates  in  the  less  favored 
towns,  however,  there  was  no  such  approbation. 
They  were  undoubtedly  discriminated  against,  and 
instead  of  recognizing  that  it  was  the  inevitable 
result  of  that  competition  so  universally  applauded, 
they  regarded  it  as  the  deliberate  persecution  of 
great  corporate  interests. 

In  the  West  this  feeling  was  most  intense,  and  the 
Granger  movement,  which  began  in  Illinois  in  1870, 
and  attained  the  dimensions  of  a  political  power 
three  years  later,  attests  its  violence.  Of  the  legis- 
lation growing  out  of  this  agitation  in  the  West  there 
is  little  need  to  speak.  The  railroad  commissions, 
as  at  first  there  organized,  were  too  extreme  in 
their  partisanship  to  exert  great  remedial  influence. 
Drastic  laws  enacted  by  the  legislatures,  scaling 
arbitrarily  all  rates  to  the  basis  of  the  competitive 
rate,  nearly  ruined  the  railroads.  Taxes,  wages,  and 
fixed  charges  had  to  be  met,  and  rates  on  that  basis 
could  not  accomplish  it.  Capital  became  frightened 


and  withdrew,  and  development  in  those  sections 
was  arrested  to  such  an  extent  that  even  the  legisla- 
tures themselves  became  alarmed,  and  where  the 
Granger  movement  had  flamed  the  fiercest  it  died 
the  soonest,  and  within  three  or  four  years  less 
arbitrary  laws  were  passed,  and  the  commissions 
became  less  bitter  in  their  antagonism. 

Early  commissions  in  the  East  were  more  fortu- 
nate, owing  to  the  fact  that  the  resident  ownership  of 
railway  stocks  and  bonds  made  their  spirit  more 
temperate  and  their  powers  less  arbitrary.  Of  this 
early  appearance  of  the  State  regulation  of  railroads, 
afterward  developed  in  1 886  to  national  proportions, 
the  scope  of  this  article  prevents  extended  mention, 
the  subject  falling  more  strictly  within  the  lines  of 
the  chapter  on  "  Interstate  Commerce." 

Adhering,  then,  to  the  original  lines  of  railroad 
discussion,  we  come  in  1873  to  that  epoch-mark- 
ing event,  the  Saratoga  Conference.  Competition 
was  verging  on  chaos.  The  solvent  lines,  having 
competed  until  combination  had  been  forced  as  the 
alternative  of  ruin,  now  sought  to  present  a  united 
front  to  the  bankrupt  and  reckless  roads,  whose 
motto  was  "  business  at  any  price."  The  five  great 
trunk-lines  connecting  the  Eastern  seaboard  with 
the  interior  were  the  Baltimore  and  Ohio,  the  Penn- 
sylvania, the  Erie,  and  the  New  York  Central,  and 
north  of  all  these  the  Grand  Trunk,  a  Canadian  line. 
Agents  from  the  first  four  of  these  lines  had  from 
time  to  time  met  at  regular  intervals  and  published 
agreed  rates.  In  the  summer  of  1873,  however, 
Commodore  Vanderbilt  being  at  Saratoga,  repre- 
sentatives from  the  Erie  and  the  Pennsylvania  met 
him  there,  and  an  arrangement  was  entered  into  by 
which,  in  addition  to  agreeing  upon  tariffs,  the  roads 
in  question  were  to  establish  a  board  of  arbitration 
to  adjust  disputes.  President  Garrett,  of  the  Balti- 
more and  Ohio,  absent  from  the  original  conference, 
but  consulted  later,  was  the  only  dissentient  Ameri- 
can. He  refused  to  submit  the  independent  action 
of  his  road  to  any  board  of  arbitration.  A  rate  war 
with  his  nearest  neighbor  in  the  combination,  the 
Pennsylvania,  was  therefore  begun,  which  resulted 
in  the  undoing  of  the  work  of  the  Saratoga  Confer- 
ence, and  all  four  of  the  American  lines  going  back 
to  the  old  arrangement  of  a  mutually  agreed-upon 
freight  tariff  and  independent  action. 

The  Grand  Trunk,  cooperated  with  by  numerous 
small  Western  roads,  started  one  of  the  most 
momentous  railroad  wars  ever  known,  and  one  that 
bade  fair  for  a  time  to  transfer  to  Boston  the  com- 
mercial supremacy  previously  enjoyed  by  New  York. 
The  terminals  of  this  line,  by  virtue  of  its  connec- 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


107 


tions,  were  Milwaukee  and  Boston,  and  between 
these  points  rates  were  fixed  at  a  figure  that  was 
shortly  diverting  from  Chicago  and  New  York  the 
great  stream  of  traffic,  hitherto  uninterrupted,  be- 
tween these  great  centers.  Neither  Milwaukee  nor 
Boston  being  competitive  points  for  the  other  four 
great  trunk-lines,  these  roads  were  disinclined  to 
commence  a  ruinous  rate  war;  but  the  divergence 
of  New  York's  trade  to  Boston  became  at  length  so 
alarming,  in  the  winter  of  1875,  that  the  New  York 
Central  was  forced  to  take  action,  which  it  did  with 
an  initial  and  sweeping  cut  of  sixty  per  cent.  Fol- 
lowing the  invariable  rule  in  such  cases,  the  warring 
parties  soon  reached  the  point  when  an  agreement 
was  necessary,  and  a  sort  of  truce  was  patched  up 
in  December,  which,  after  enduring  a  few  weeks, 
ended  in  a  general  me'le'e,  in  which  the  Erie,  the 
New  York  Central,  and  the  Grand  Trunk  were  the 
most  prominent,  although  after  about  eight  months 
the  entire  five  trunk-lines  were  ready  for  almost  any 
sort  of  an  agreement. 

The  significance  of  this  earliest  rate  war,  by  which 
Boston  had  benefited  so  greatly,  was  not  lost  upon 
Philadelphia  and  Baltimore,  and  all  through  the 
succeeding  struggles  the  underlying  motive  was 
found  in  the  desire  of  one  of  the  three  other  great 
seaboard  cities  to  surpass  New  York.  With  the 
exception  of  Boston,  already  sufficiently  favored  by 
the  Grand  Trunk,  both  Philadelphia  and  Baltimore 
had  always  been  conceded  a  slight  differential  ad- 
vantage in  rates  to  neutralize  the  difference  in  ocean 
freights  their  location  imposed.  New  York  found 
herself  unable  to  concede  the  advantage  longer  when 
her  rivals  began  their  war  for  supremacy,  and  vari- 
ous more  equitable  substitutes  were  proposed  and 
tried.  Nothing  availed,  however,  to  avert  one  final 
struggle  between  all  the  lines ;  and  after  rates  had 
sunk  to  from  2.8  mills  to  3.5  mills  per  ton  per  mile 
between  the  East  and  West,  the  roads  at  length 
wearied,  and  the  joint  or  "  pool "  system  was  for  the 
first  time  adopted  on  the  great  trunk-lines  in  1877  ; 
Colonel  Fink,  who  had  originated  and  successfully 
carried  out  this  idea  two  years  before  in  the  South- 
em  Railway  and  Steamship  Association,  being  called 
upon  to  take  charge.  Under  the  terms  of  this  first 
"  pool "  the  Baltimore  and  Ohio  received  but  nine 
per  cent.,  the  Pennsylvania  twenty-five  per  cent., 
and  the  New  York  Central  and  the  Erie  thirty-three 
and  a  third  per  cent  each. 

The  important  relation  which  these  four  great 
trunk-lines  concerned  in  the  East  and  West  traffic 
bear  to  the  railroad  system  causes  them  to  serve 
most  readily  the  purposes  of  illustration  of  the 


tendency  toward  closer  relations  displayed  by  the 
American  railroads  in  their  advance  toward  the 
homogeneous,  even  if  not  united,  system  of  the 
future.  Through  wars  almost  numberless  the  out- 
come has  been  seen  in  every  case  to  have  been  the 
assumption  by  the  competitors  of  some  mutual  obli- 
gation for  the  sake  of  peace.  The  "  pooling  "  idea 
thus  traced  to  its  first  great  manifestation  has  not 
been,  however,  of  such  recent  growth  as  might  be 
supposed.  It  was  introduced  into  New  England  at 
an  early  date,  and  quietly  used  for  a  long  time. 
The  celebrated  Chicago-Omaha  pool  of  1870  and 
the  Southern  organizations  also  preceded  the  Trunk- 
Line  Association ;  but  all  of  these  were  largely  ex- 
perimental, and  certainly  lacked  the  coherence  aris- 
ing from  the  discipline  of  an  actual  central  authority. 
When,  after  years  of  the  bitterest  war,  however,  the 
great  trunk-lines  finally  came  to  adopt  it,  men  real- 
ized that  it  had  been  inevitable.  To-day,  while  rate 
wars  and  the  tactics  of  competition  are  by  no  means 
ended,  nor  ever  will  be  so  long  as  many  interests 
compete  for  similar  ends,  their  effects  are  no  longer 
so  ruinous  as  twenty  years  ago.  With  the  great 
corporate  interests  vested  in  the  railroads  joining 
with  one  another  for  mutual  protection  and  advan- 
tage, that  thing  most  vividly  pictured  by  the  dema- 
gogues has  never  come  to  pass.  Instead  of  a  great 
monopoly  crushing  the  public  rights  underfoot  is 
found  a  condition  of  things  so  vastly  improved  since 
1873  that  it  seems  scarcely  possible  that  railroad 
science  can  have  advanced  so  greatly  in  so  short  a 
space  of  time.  Rates  have  fallen  to  a  point  abso- 
lutely impossible  before  the  era  of  improvement,  and 
both  freight  and  passengers  are  now  transported  for 
less  money,  and  with  more  safety,  speed,  and  con- 
venience, than  in  any  other  country  on  the  face  of 
the  earth.  Freight  rates,  which  in  1873  averaged 
1.985  cents  per  ton  mile  on  the  great  trunk-lines, 
fell  in  the  twenty  years  ending  in  June,  1893,  to  .8 
of  a  cent  per  ton  mile,  a  reduction  of  nearly  sixty 
per  cent.  In  the  West  and  in  the  South  the  reduc- 
tion has  been  much  greater.  In  order  to  better 
understand  the  tremendous  significance  of  this 
decrease  a  further  reference  to  the  figures  will  be 
useful.  The  shippers  of  the  country  paid  in  round 
figures  the  sum  of  $808,000,000  for  the  transpor- 
tation of  their  freight  in  1893.  Had  the  rates  of 
twenty  years  ago  still  prevailed,  the  sum  of  $2,020,- 
000,000  would  have  been  required  to  meet  these 
charges.  Thus  the  people  and  the  commercial  in- 
terests of  the  United  States  were  saved  an  annual 
amount  of  $1,212,000,000. 

Such  a  tremendous  falling  off  in  rates  has,  of 


108 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


course,  only  been  withstood  by  the  railroads  by  the 
exercise  of  the  most  rigid  economies,  the  adoption 
of  every  improvement  tending  to  minimize  the  cost 
of  operation,  and  an  adaptation  to  latter-day  needs, 
which,  on  the  closest  of  profit  margins,  demand  a 
volume  of  business  of  gigantic  proportions  in  order 
to  balance  the  long  account  of  the  fixed  charges. 
Nor  has  this  wonderful  change  in  railroad  conditions 
come  about  without  injury  to  the  corporations  en- 
gaged. No  less  than  forty  per  cent,  of  the  mileage, 
representing  about  thirty-one  per  cent,  of  the  prop- 
erty valuation  of  the  railroads,  has  been  forced  into 
bankruptcy  during  this  period.  The  lines  that  have 
survived  the  strain  have  done  so  only  by  the  ex- 
penditure of  millions  in  the  improvement  of  their 
properties. 

One  of  the  greatest,  as  it  is  perhaps  the  most 
important,  of  all  these  changes  has  been  the  intro- 
duction of  steel  rails  in  the  place  of  the  old  iron 
ones.  In  the  twenty  years  following  the  adoption 
of  these  rails  on  the  New  York  Central  the  volume 
of  traffic  increased  from  400,000,000  ton  miles  to 
2,000,000,000  ton  miles.  With  the  old  iron  rails 
such  an  enormous  traffic  would  have  been  practically 
impossible,  and  its  cost  absolutely  prohibitive.  Be- 
ginning with  a  rail  but  little  heavier  than  the  iron 
ones  then  in  use,  the  weight  has  been  gradually 
increased  as  its  economy  was  appreciated.  To-day 
the  loo-pound  rail  is  in  not  uncommon  use  on  lines 
of  heavy  traffic,  especially  on  curves  and  grades, 
and  it  has  been  found  one  of  the  most  potent  factors 
in  reducing  cost  both  in  draft-power  required  and  in 
diminishing  wear  and  tear  on  rolling-stock.  The 
increased  use  of  steel  in  place  of  iron  for  rails, 
resulting  in  the  practical  displacement  of  the  latter 
by  the  former,  is  best  shown  in  the  figures  giving  the 
annual  production  of  railroad  bars  during  the  period 
covered  by  the  change. 

PRODUCTION  AND  DOMESTIC  CONSUMPTION 
OF  RAILROAD  BARS. 


RETAINED  FOR 

YEAR. 

IRON. 

STEEL. 

TOTAL. 

DOMESTIC 

CONSUMPTION. 

Tans. 

Tons. 

Tom. 

Tons. 

1873.    • 

679,520 

"S,I92 

794,712 

794,371 

1875. 

447,901 

259,699 

707,600 

706,598 

l88o. 

440,859 

864,353 

1,305,212 

1,304,181 

1885.    . 
1890.    . 

13,228 
13.882 

963,750 
1,871425 

976,978 
1,885,307 

973,009 
1,869,426 

1892.    . 

10437 

1,541407 

1,551,844 

1,536,146 

The  tons  in  this  table  are  figured  at  long  weight, 
2240  pounds. 

A  still  clearer  idea  of  the  increase  in  the  use  of 
steel  rails,  expressed  in  mileage,  may  be  had  from 


the  fact  that  where  in  1880  there  were  81,967  miles 
of  iron  to  33,680  miles  of  steel  rails,  there  were  in 
1892  only  38,641  miles  of  iron  as  against  182,858 
miles  of  steel  rails,  an  increased  percentage  of  steel 
from  29.1  to  82.6  of  the  total  mileage. 

The  direct  result  of  the  introduction  of  steel  rails 
was  an  increased  weight  of  rolling-stock,  and  an  in- 
crease in  more  than  an  arithmetical  proportion  of 
the  carrying  capacity  per  car.  The  freight-car  of 
a  capacity  of  30,000  pounds,  used  a  few  years  ago, 
is  obsolete  and  wasteful,  while  those  of  60,000 
pounds  and  of  even  greater  capacity  are  now  in 
general  use,  and  may  be  classed  as  standard.  As 
cars  increased  in  weight  so  did  the  locomotives. 
With  the  heavy  steel  rail  came  of  necessity  the 
weightier  and  more  compact  road-bed,  and  stone- 
ballasted  ways  succeeded  the  old  dirt  embankment. 
Over  this,  immense  weights  can  roll  freely,  and  the 
locomotive  has  become  a  mammoth.  In  place  of 
the  little  one-ton  Tom  Thumb  of  Cooper,  or  the 
heavy  seven-ton  engines  of  the  Stephensons,  are 
found  to-day  the  sixty  and  seventy  ton  passenger- 
fliers  and  the  eighty  and  ninety  ton  freight-engines. 
One  giant  of  the  modern  rail  is  a  ten-driver  freight- 
locomotive  of  the  Lake  Erie  and  Western,  which 
weighs,  as  it  couples  to  its  train,  115  tons,  and  could 
draw  the  combined  rolling-stock  of  every  road  exist- 
ing in  the  United  States  in  1835. 

Important  as  track  and  road-bed  are  to  this  de- 
velopment, they  are  but  a  part ;  and  as  the  strength 
of  a  chain  is  that  of  its  weakest  link,  so  would  the 
modern  railway  fail  were  it  not  for  the  improved 
bridge  construction  which  has  also  come  during  the 
past  quarter  of  a  century.  All  bridges  in  the  earlier 
days  of  the  railroad  were  of  wood,  and  the  long 
trestleworks  with  which  the  old  engineers  crossed 
uncomfortable  swamps  are  still  well  remembered. 
Apart,  however,  from  the  question  of  its  structural 
strength,  the  wooden  span  was  dangerous  from  other 
reasons :  it  would  decay  in  the  weather ;  it  would 
burn  if  a  hot  coal  dropped ;  and  it  would  warp  and 
shrink  if  the  material  used  in  its  construction  was 
unseasoned.  Even  an  improved  truss,  obviating  to 
a  certain  extent  the  latter  fault,  was  insufficient  to 
make  the  wooden  bridge  either  a  safe  or  a  profitable 
feature  of  railway  construction,  and  by  1870  it  had 
begun  to  retreat  before  the  iron  bridge.  This  latter 
material  has  now  so  nearly  superseded  wood  in  the 
bridges  of  the  country  that  it  is  scarcely  necessary 
to  discuss  it.  The  many  designs  of  truss  and  span 
give  wide  variety  in  its  application,  from  great  sus- 
pension-bridges to  lofty  viaducts.  One  of  the  latest, 
and  perhaps  the  greatest  achievement  of  the  bridge 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


109 


builder's  art,  is  the  so-called  cantilever,  which  may 
fairly  be  claimed  as  an  American  invention,  since 
the  first  suggestion  of  it  came  from  Thomas  Pope, 
who  proposed  in  1810  a  cantilever  bridge  across  the 
East  River.  The  first  cantilever  bridge  built  for 
railroad  traffic  was  across  the  Kentucky  River, 
C.  Shaler  Smith  being  the  engineer.  Since  then  there 
have  been  some  wonderful  examples  of  this  style  of 
construction. 

The  bridges  and  road-beds,  improved  as  outlined 
above,  have  constituted  lines  over  which  the  enor- 
mous traffic  of  to-day  passes  easily  and  cheaply. 
Single  locomotives  now  draw  trains  weighing  2500 
tons.  Huge  palace-cars,  weighing  as  much  as  a 
whole  train  did  in  the  earlier  days,  are  now  whirled 
along  at  a  rate  that  fifty  years  ago  would  have  been 
considered  beyond  mortal  attainment.  Still  engi- 
neers and  railway  officials  are  not  satisfied,  and  there 
is  a  never-ceasing  endeavor  on  all  sides  to  advance 
still  further.  The  introduction  of  electricity  as  a 
motive  power,  already  heralded  by  the  Baltimore 
and  Ohio  in  their  Baltimore  subway,  and  by  the 
line  at  Nantasket,  Mass.,  is  the  first  step  in  what 
many  able  engineers  believe  will  be  an  advance  to 
speed  in  comparison  with  which  that  of  to-day  will 
seem  as  little  as  already  does  the  "frightful  velo- 
city "  of  forty  years  ago,  when  a  traveler  held  his 
breath  if  the  speed  was  greater  than  thirty  miles  an 
hour. 

A  very  natural  query  raised  by  the  discussion  of 
speed  on  the  modern  railway  is  how  it  has  been 
accomplished  concurrently  with  perfect  safety.  That 
traveling  is  nearly  as  safe  as  remaining  at  home  is 
generally  conceded,  and  in  the  United  States  espe- 
cially fewer  deaths  are  placed  against  the  railroads 
in  proportion  to  the  miles  traveled  than  in  any  other 
nation.  Even  with  this  favorable  showing  the  laws 
are  so  rigid  in  holding  railroad  corporations  to  the 
strictest  liability  that  nearly  $2,000,000  annually  are 
awarded  in  death-claims  and  damages  against  them. 
Spurred  on  by  the  strictness  with  which  they  were 
held  to  account,  and,  little  as  it  may  be  believed, 
actuated  also  by  humane  motives,  the  railroads  have 
adopted  every  new  and  improved  appliance  tending 
to  increased  safety. 

Since  the  first  use  of  the  telegraph  on  the  line  of 
the  Baltimore  and  Ohio,  everything  tending  to  place 
hundreds  of  miles  of  road  under  central  and  system- 
atized observation  and  control  has  been  adopted  as  it 
appeared.  The  train  despatcher,  with  his  numerous 
assistants,  in  the  great  union  station,  now  directs 
the  movements  of  every  train.  Not  a  driving- 
wheel  turns  but  by  his  orders,  nor  a  moment  of  lost 


time  is  noted  that  is  not  at  once  explained  to  him. 
The  great  switch-towers,  where  scores  of  levers 
concentrate  the  directing  force  of  acres  of  steel 
network,  are  the  development  of  the  interlocking- 
switch  system.  Air-brakes,  torpedoes,  flags,  lights, 
semaphores,  electric  enunciators,  derailment  guards 
and  split-rail  switches,  safety-bolts,  and,  last  and 
greatest  of  all,  the  block  system,  guarding  both  ends 
of  the  flying  express  at  once,  are  some  of  the  meth- 
ods and  devices  by  which  safety  has  been  secured. 
Of  these,  next  to  the  block  system,  the  air-brake, 
which  was  first  applied  to  passenger-trains  in  1868, 
is  perhaps  one  of  the  most  notable  advances. 

The  evolution  of  the  rolling-stock  of  the  railroads, 
particularly  as  it  is  connected  with  the  passenger 
service,  began  almost  with  the  introduction  of  train 
service.  The  English  compartment  coach  was 
quickly  superseded  by  the  so-called  American  car, 
with  its  central  aisle,  side-seats,  and  undivided  space. 
The  first  sleeping-car,  which  was  simply  an  ordinary 
passenger-car  fitted  with  rude  wooden  berths,  was 
run  on  the  Cumberland  Valley  Railroad  of  Pennsyl- 
vania from  Harrisburg  to  Chambersburg  in  1836. 
Sleeping-cars  continued  of  the  same  crude  sort  until 
1864,  when  George  M.  Pullman  built  the  first  of  his 
modern  coaches  in  the  shops  of  the  Chicago  and 
Alton  road.  This  car,  named  the  Pioneer,  was  both 
too  heavy  and  too  wide  for  the  roadways  of  that 
day ;  but  a  special  car  being  required  to  convey  the 
body  of  President  Lincoln  after  his  assassination, 
the  Pioneer  was  taken,  and  the  Chicago  and  Alton 
altered  its  road  to  suit  its  dimensions.  Later,  when 
President  Grant  traveled  through  the  West,  this  car 
was  taken,  and  several  of  the  other  roads  made  the 
changes  necessary  to  its  passage  over  their  lines. 

Thus  the  Pullman  car  was  introduced,  and  the 
Pullman  Car  Company  was  organized  in  1867. 
The  Wagner  palace-car  was  also  early  in  the  field, 
especially  on  the  Vanderbilt  lines.  The  first  hotel 
or  buffet  car  was  built  in  1867,  and  the  Delmonico, 
the  first  Pullman  dinner-car,  was  ran  on  the  Chicago 
and  Alton  road  in  the  year  following.  The  vesti- 
bule, making  a  safe  passageway  between  the  cars 
of  a  moving  train,  was  first  suggested  by  a  sort  of 
canvas  diaphragm  used  to  connect  cars  on  the 
Naugatuck  Railroad  in  Connecticut  in  1857,  but  it 
was  not  until  1887  that  the  first  vestibuled  Pullman 
train  was  operated.  To-day  a  vestibuled  limited 
express  has  several  luxurious  sleeping  or  chair  cars, 
a  dining-car,  smoking-saloon,  library  and  writing- 
room,  with  stenographers  and  type-writers  in  atten- 
dance, bath-room,  and  barber-shop.  The  old-time 
method  of  tickets  issued  by  each  line  separately, 


110 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


involving  change  of  cars  and  several  payments  of 
fare,  is  now  done  away  with  by  the  system  of 
coupon  tickets,  in  regulation  of  which  the  passenger- 
agents  department  of  the  different  railroads  has 
assumed  a  complexity  of  detail  second  only  to  that 
in  the  freight  department. 

The  government's  use  of  the  railroad  for  the  con- 
veyance of  the  mails  is  too  generally  understood  to 
require  more  than  a  brief  mention.  Congress,  on 
July  7,  1838,  constituted  every  railroad  in  the 
United  States  a  post-route.  For  this  service  a  stip- 
ulated amount  per  pound  has  always  been  paid  the 
railroads  as  common  carriers  of  freight  mail-matter. 
A  special  compartment  in  the  baggage-car  served 
for  many  years  for  the  mail;  but  in  1864  Colonel 
Armstrong  introduced  the  railway  mail-car,  as  had 
been  suggested  two  years  before  by  W.  A.  Davis,  a 
clerk  in  the  St.  Joseph  post-office.  The  first  fast 
mail-trains  were  run  in  1874  by  the  New  York 
Central,  and  a  little  later  by  the  Pennsylvania. 
The  receipts  from  the  mail  service,  together  with 
those  from  the  express  companies,  etc.,  make  up 
about  five  per  cent,  of  the  revenues  of  the  railroads, 
and  the  passenger  service  contributes  about  twenty- 
five  per  cent. ;  while  the  transportation  of  freight, 
which  is  the  bulk  of  the  business,  adds  seventy  per 
cent,  to  the  incomes  of  the  railroad  corporations. 

The  rolling-stock  necessary  to  the  transaction  of 
this  business,  as  apportioned  among  the  different 
branches,  is  as  follows : 

Passenger-cars 27,909 

ge,  mail,  and  express  cars 7>937 


35.846 
1,191,884 

1,227,730 


Freight-cars 

Total  cars  

Locomotives 36,293 

The  freight  service  being,  therefore,  the  most  im- 
portant function,  financially  and  commercially,  of  the 
railroads,  it  has  attained  an  economic  importance 
of  the  first  magnitude.  In  this  phase  it  has  already 
been  considered,  but  in  its  practical  working  there 
has  been  developed  a  system  of  such  far-reaching 
scope  and  immense  potentiality  that  it  deserves  de- 
scription. The  days  when  no  road  allowed  its 
freight-cars  to  leave  its  own  tracks  have  long  since 
passed.  The  expense  and  delay  incident  to  the 
frequent  transhipment  of  through  freight  became 
insupportable,  and  the  commercial  world  rebelled. 
The  adoption  of  a  standard  gauge  and  the  accep- 
tance of  the  principles  of  joint  traffic  began  directly 
after  the  Civil  War,  and  have  extended  until  they 
have  reached  the  present  conditions.  Freight  is 


now  loaded  in  a  car  at  New  York  and  not  unloaded 
until  it  reaches  San  Francisco.  Each  line  over 
which  the  car  travels  on  its  journey  charges  its  own 
rates  and  receives  its  due  proportion  of  the  total 
charges.  The  road  owning  the  car  in  which  the 
goods  are  shipped  receives  in  addition  from  three 
eighths  to  three  fourths  of  a  cent  per  mile  from  the 
other  roads,  for  whatever  distance  the  car  may 
travel  on  their  lines.  The  theory  is  that  the  Eastern 
car,  when  it  reaches  San  Francisco  and  is  unloaded, 
is  to  be  returned  to  its  home  line  as  soon  as  pos- 
sible. Unfortunately  in  practice  this  results  but  un- 
satisfactorily, despite  the  thorough  organization  of 
the  modern  car-accountant's  department.  Delays 
in  unloading,  reloading  for  a  point  on  the  home- 
ward journey,  reloading  consigned  to  order,  and 
hundreds  of  other  causes  contribute  to  make  more 
than  problematical  the  date  of  return  of  a  car  that 
has  once  got  out  of  home  territory.  Plans  to  remedy 
the  detention  and  "to  order"  abuses  have  been 
proposed  and  tried  in  great  number,  the  per  diem 
plan  of  demurrage  or  car  rental,  advocated  by  Mr. 
Fink,  and  introduced  for  a  short  time  on  the  trunk- 
line  roads  in  1888,  being  about  as  successful  as  any. 

The  so-called  fast  freight  lines  are  an  important 
feature  of  this  branch  of  railroad  transportation. 
They  are  of  two  kinds.  The  first  is  simply  the 
development  carried  a  little  further  of  the  system 
already  described — the  application  of  the  coopera- 
tive principle  among  a  number  of  roads.  The  sec- 
ond is  the  operation  of  cars  by  a  private  corporation 
deriving  its  revenue  from  the  same  mileage  charge 
with  which  the  railroads  compensate  one  another  for 
the  use  of  their  rolling-stock. 

Through  all  these  various  channels  the  great  vol- 
ume of  the  country's  traffic  flows  steadily  back  and 
forth.  If  our  system  is  not  the  best  in  point  of 
routine  detail  and  administration,  it  is  still  easily  first 
in  that  far  more  important  consideration  of  cost. 
Nowhere  in  the  world  is  freight  hauled  so  cheaply 
as  it  is  in  the  United  States.  The  average  cost  of 
transportation  per  ton  mile  is,  as  has  already  been 
stated,  .8  cent.  In  Europe  it  is  two  and  one  half 
times  as  much,  or  two  cents  per  ton  mile.  The 
difference  amounts  in  the  annual  aggregate  to  mil- 
lions of  dollars,  the  greater  part  of  which  represents 
an  actual  saving  to  the  people  of  the  country  on  the 
standard  articles  of  consumption  and  necessaries  of 
life.  The  actual  value  in  dollars  and  cents  which 
this  saving  represents  can  easily  be  figured  from  the 
totals  given  by  "Poor's  Manual"  for  1895:  the 
number  of  tons  of  freight  moved  was  675,129,747, 
and  the  average  length  of  haul  121.89  miles,  giving 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


in 


82,289,400,498  ton  miles.  Estimating  the  average 
difference  between  American  and  European  rates  at 
1.2  cents,  the  difference  in  total  charges,  accruing 
as  a  clear  saving  to  the  public,  is  $987,472,805.97. 

The  strikes  and  labor  troubles  from  which  the 
railroads  have  ever  suffered  are  scarcely  to  be  dis- 
cussed within  the  limits  of  this  article.  The  first 
great  strike  appears  to  have  been  that  on  the  Balti- 
more and  Ohio  in  1857,  and  the  last  was  the 
uncalled-for  and  disastrous  Chicago  riot  of  1894. 
It  is  scarcely  possible  to  measure  in  money  the 
damage  done,  since,  apart  from  the  losses  sustained 
by  either  party  to  the  dispute,  is  the  loss  to  the 
business  interests  of  the  country  through  impeded 
transportation  and  obstruction  of  the  mails.  Any 
one  branch  of  business  that  employs,  as  the  railroads 
do,  2,000,000  people  is,  of  course,  liable  to  labor 
troubles ;  but  in  view  of  the  relations  held  by  the 
railroads  to  the  general  interests  of  the  country,  it 
is  scarcely  reasonable  that  the  conveniences  and 
necessities  of  nearly  70,000,000  should  be  disre- 
garded, even  if  the  interests  of  the  other  2,000,000 
were  being  thereby  advanced,  which  is  by  no  means 
so  certain  as  labor  leaders  would  make  others  think. 

The  growth  of  the  railroads  of  this  country,  coin- 
cident as  it  has  been  with  Western  development, 
has  witnessed  a  steady  march  of  the  mileage  center 
in  the  direction  popularly  supposed  to  be  taken  by 
the  star  of  empire.  This  advance,  together  with  the 
relative  growth  of  railroad  mileage  of  the  different 
groups  of  States,  is  shown  by  the  following  tables : 

MILEAGE  CENTERS. 

1840 25  miles  west  of  Mauch  Chunk,  Pa. 

1850 25  miles  northwest  of  Williamsport,  Pa. 

1860 60  miles  south  of  Mansfield,  O. 

1870 Paulding,  O. 

1880 30  miles  northwest  of  Logansport,  Ind. 

1888 90  miles  south-southwest  of  Chicago,  111. 

MILEAGE   INCREASE  BY  GROUPS  OF   STATES. 


1850. 

i860. 

1870. 

1880. 

1890. 

New  England.  .  .  . 

2,507 

3,660 

4A94 

5,982 

6,831 

Middle  States  
Southern  States  .  . 
Western  States  and 

3,202 
2,036 

6,705 
8,838 

10,964 
11,192 

15,872 
14,778 

21,53° 
29,209 

Territories    .... 
Pacific  States  and 

1,276 

11,400 

24.587 

52-589 

62,394 

Territories    .... 

21 

1.677 

4,080 

0,804 

The  last  subject  to  be  taken  up  in  the  discussion 
of  the  American  railroad  falls  more  properly  within 
the  domain  of  the  financier.  When  it  is  remembered 
that  $5,075,629,070  capital  stock  and  $5,665,734,- 
249  of  bonded  indebtedness  are  represented  by  rail- 
roads in  this  country,  the  importance  of  the  financial 
interests  involved  becomes  readily  apparent.  Financ- 


ing has  come  to  be  as  essential  a  department  of  railway 
management  as  any  other,  and  is,  generally  speaking, 
more  complicated  and  less  capable  of  explanation. 
Historically  considered,  railroad  securities,  which 
have  been  for  years  the  most  prominent  feature  of  the 
money  market,  have  had  numerous  ups  and  downs. 

In  the  very  earliest  days,  when  all  roads  made 
money  freely,  and  the  field  had  not  yet  become 
overcrowded,  investors  subscribed  for  railroad  stock 
almost  as  fast  as  it  could  be  issued.  The  crisis  of 
1857,  with  its  demonstration  of  the  liabilities  of 
stock  under  the  bondholders'  mortgage,  caused  a 
sudden  and  violent  reversion  of  public  sentiment  in 
favor  of  the  latter  class  of  securities.  Here  again 
the  pendulum  swung  too  far  in  the  opposite  direc- 
tion. It  was  a  simple  matter  for  unscrupulous  men 
to  organize  a  company  and  pay  in  a  small  fraction 
of  the  stock  and  float  their  bonds.  The  bonds  once 
floated,  some  favored  construction  company  would 
be  given  the  contract  to  build  the  road  at  a  price 
from  ten  to  forty  per  cent,  in  advance  of  its  real 
cost.  Then  the  first  reverse  threw  the  road  into 
bankruptcy,  and  under  their  mortgage  the  bond- 
holders would  take  possession,  thus  securing  a  road 
worth  far  less  than  the  face  value  of  its  bonds,  and, 
as  shown,  from  ten  to  forty  per  cent,  less  than  the 
investment  made  at  the  price  for  which  these  bonds 
had  been  floated. 

The  crisis  of  1873  brought  the  abuses  under  the 
bond  system  home  to  many,  but  the  bitter  days 
during  1885  were  necessary  to  fully  impress  the 
lesson  upon  the  public  mind.  Since  then  a  better 
understanding  of  conditions  has  prevailed,  and  under 
responsible  managements  the  securities  of  the  rail- 
roads have  come  to  represent  intrinsic  values,  reliable 
and  stable,  except  so  far  as  all  great  interests  are 
subject  to  prevailing  national  conditions. 

The  present  condition  of  the  railroads  of  the 
United  States  is  thus  summarized  in  a  statement  of 
their  revenues  and  expenditures  in  "  Poor's  Manual " 
for  1895  : 

STATEMENT  OF  RAILROAD  CONDITION  AND 

REVENUES. 

Capital  stock $5,075,629,070 

Funded  debt 5,665,734,249 

Unfunded  debt 383,567,232 

Current  debt 440,669,656 

Total  liabilities $1 1,565,600,207 

Cost  railroad  and  equipment $9,789,1:43,001 

Real  estate,  stocks,  bonds,  and  other  invest's.     1,167,879,162 

Other  assets 240,526,350 

Current  accounts 226,502,371 

Total  assets $11,924450,884 

Excess  assets  over  liabilities $358,850,677 


112 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


STATEMENT  OF  RAILROAD  CONDITION  AND  REVENUES. — 
Continued. 

Passenger-traffic  earnings $276,031,571 

Freight-traffic  earnings 700477,409 

Other  traffic  earnings 91,134.533 

Elevated  roads  (New  York) 12,661,502 

All  other  receipts,  including  rentals  received  by 

lessor  companies 9^,477>443 

Revenue  $1,176,782458 

Interest  on  bonds $237,620,367 

Other  interest 7464,971 


Operating  expenses 757>765,739 

Dividends 85,278,669 

Rentals,  tolls,  etc 60,900,454 

Miscellaneous     38,220492 


Payments $1,187,250,692 

Excess  of  fixed  charges  and  miscellaneous  pay- 
ments revenue $10468,234 


Pacific  coast  roads  were  the  heaviest  sufferers.  Con- 
sumption had  almost  ceased  in  the  articles  which 
were  superfluous,  or  purely  for  ornament,  and  the 
demand  for  other  articles  ceased  as  far  as  was  pos- 
sible. Under  these  circumstances  manufacturers  had 
little  to  deliver,  and  merchants  and  dealers  found 
it  impossible  to  pay  for  more  than  a  moiety  of  what 
they  had  required  in  previous  years.  In  the  face  of 
this  tremendous  decline  in  receipts  the  railroads  set 
themselves  to  a  retrenchment  of  expenses  that  re- 
sulted in  reducing  the  net  loss  in  earnings  to  a  point 
where,  in  some  few  notable  cases,  the  net  income 
increased.  How  vast  these  economies  were  is  best 
shown  in  the  following  table,  including  a  selected 
number  of  the  larger  and  better-known  roads: 


ECONOMIES  OF  RAILROADS,  1894. 


RAILROADS. 

DECREASE  IN  GROSS 
EARNINGS. 

DECREASE  IN  NET 
EARNINGS. 

ECONOMIES. 

$12,794,499 

$2,  44s,  120 

$IO.74Q,77O 

Atchison,  Topeka,  and  Santa  F6*  (four  roads)  

7.Q6S.Q56 

C,  706,  747 

2,2s<),21? 

6,841,605 

I,4C7,727 

5,787,882 

Philadelphia,  Reading,  and  C.  and  I  

6,083,823 

I,742,6l2 

4.741,21  1 

Delaware,  Lackawanna,  and  Western  (three  roads)   . 

5,732,111 

1,203,734 

4.  528,777 

Chicago,  Milwaukee,  and  St.  Paul  

{,386.656 

1*457,7?^ 

7,Q77,  7OI 

New  York  Central  and  Hudson  River  

4,913,080 

7O4,t;  62 

4,208,518 

New  York,  Lake  Erie,  and  Western  

4,888,272 

2.5  72,  717 

2.3I5.Q55 

Chicago  and  Northwestern   

4,680,6^8 

2,491,366 

2,189,272 

4,607,006 

3.477,0  <;  7 

1.120,040 

Illinois  Central  

?,6oi;,6^8 

2,311,809 

1,383,829 

Southern  Pacific  (six  roads)  

7,571,701 

2,092,716 

I,47Q.O75 

Baltimore  and  Ohio  (two  roads)  

3,485,692 

1,245,263 

2,240,420 

Michigan  Central  and  Canada  Southern  

3,478,000 

767,000 

3,115,000 

Northern  Pacific  

7,046,726 

1,520,518 

1,526,208 

2  604.000 

i  087  <;is 

I  S2O  tj8,l 

Chicago  and  Alton                          ... 

1.274.604. 

247.2O2 

I  O27.4O2 

Manhattan  Elevated  .         

I.I4Q,6<Q 

I  O2I,7l  I 

I27.Qd8 

The  financial  and  commercial  troubles  of  1893 
developed  in  the  railroads  a  new  phase  of  adminis- 
trative excellence  that  is  the  highest  tribute  that  can 
be  paid,  in  closing  this  article,  to  the  men  who  are 
in  practical  charge  of  the  great  railroads  of  the 
country.  By  the  report  of  the  Interstate  Commerce 
Commission,  the  year  ending  June  30,  1894,  wit- 
nessed a  shrinkage  of  $840  per  mile  in  the  gross 
revenues  of  570  roads,  representing  a  total  mileage 
of  149,559.  Dividends  on  these  roads  fell  off 
$3,999,169,  and  there  was  a  total  deficit  in  their 
accounts  of  $28,255,121.  The  Southeastern  and 


To  treat  the  vast  subject  of  the  history  of  Ameri- 
can railroads  exhaustively  in  an  article  the  limits  of 
which  are  circumscribed  by  the  exigencies  of  space 
would  be  manifestly  impossible.  If  I  have  succeeded 
in  conveying  a  picture  to  the  mind,  although  set  in 
a  small  frame ;  if  I  have  succeeded  in  demonstrating 
the  importance  of  our  railroad  system  as  a  matter  in 
which  every  patriotic  and  intelligent  citizen  is  deeply 
concerned ;  and  if  I  have,  by  telling  what  has  been 
done,  foreshadowed  the  unlimited  possibilities  of  the 
future,  I  shall  feel  satisfied  with  my  effort  to  cover  the 
ground  of  American  railway  history,  however  briefly. 


CHAPTER    XVII 

AMERICAN   CAR   BUILDING 


THE  memory  of  men  still  living  is  sufficiently 
elastic  to  stretch  back  to  the  beginnings  of 
steam-railroads  in  this  country,  and  to  com- 
prehend the  various  changes  by  which  the  modern 
railway  has  become  a  highly  organized  and  elabo- 
rately equipped  mechanism.  We  borrowed  the  rail- 
way from  England,  but  developed  it  on  our  own 
lines.  The  invention  of  the  locomotive  at  first 
simply  furnished  a  mechanical  power  to  transport 
freight  in  cars  that  had  formerly  been  hauled  by 
horses.  Tramways  were  in  use  in  the  Hungarian 
mines  during  the  sixteenth  century ;  and  Ralph 
Allen's  English  stone-car  of  1734,  with  its  flanged 
wheels  and  its  hand-brake,  is  clearly  the  forerunner 
of  the  freight-cars  of  to-day. 

The  term  "railway"  was  invented  in  1775,  when 
it  was  first  used  in  Smeaton's  reports  on  English 
transportation,  a  quarter  of  a  century  before  steam 
was  applied  to  locomotion.  Thanks  to  the  recent 
researches  of  Mr.  Clement  E.  Stretton,  we  now 
know  that  the  first  persons  ever  conveyed  by  a 
locomotive  on  rails  traveled,  on  February  24,  1804, 
behind  Trevethick's  locomotive  on  the  Pennydarran 
cast-iron  plateway  or  tramroad  to  Merthyr-Tydvil, 
in  Wales,  a  .distance  of  nire  miles.  In  order  to 
transport  long  bars  of  iron  and  timber,  the  cars  were 
made  in  pairs,  coupled  together  by  an  iron  draw-bar 
having  a  joint  at  either  end.  The  cars  had  no 
sides,  but  in  the  middle  of  each  was  fixed  a  center- 
pin  upon  which  worked  a  cross-beam  or  bolster,  and 
upon  this  cross-beam  the  timber  or  bars  of  iron  were 
placed.  On  the  occasion  adverted  to  the  trucks 
were  loaded  with  ten  tons  of  iron  bars,  and  seventy 
persons  stood  on  the  iron.  Here  we  have  the  origin 
of  the  bogie  or  truck,  the  invention  of  which  has 
been  claimed  for  this  country,  as  we  shall  see  here- 
after. Also  the  capacity  of  the  freight-car,  fixed  at 
the  beginning  at  ten  tons,  remained  at  that  figure 
for  half  a  century  or  more. 

In  1812,  John  Blenkinsop,  of  Leeds,  had  a  pri- 


vate car  built  to  carry  himself  and  his  managers  to 
his  Middleton  colliery,  while  the  workmen  rode  on 
the  coal-cars.  On  July  27,  1814,  George  Stephen- 
son's  first  locomotive,  Blucher,  drew  over  the  Kenil- 
worth  colliery  line  a  passenger-car  made  by  placing 
the  body  of  Lord  Ravensworth's  four-in-hand  coach 
on  a  wooden  frame  fitted  with  flanged  wheels. 
This  car  was  used  for  twenty  years.  On  Septem- 
ber 27,  1825,  the  Stockton  and  Darlington  Railway 
was  opened,  and  trains  of  coal-cars  were  run,  with 
one  passenger-coach,  named  the  Experiment.  This 
was  the  first  passenger-car  to  be  run  regularly  for 
the  use  of  the  public.  It  was  placed  on  four 
wheels,  and  had  a  door  at  each  end,  with  a  row  of 
seats  along  either  side  and  a  long  deal  table  in  the 
center.  This  car  was  operated  ten  days,  until  the 
novelty  was  worn  off;  and  then  the  faster  stage- 
coaches carried  the  passengers.  It  was  not  until 
September  15,  1830,  that  the  Liverpool  and  Man- 
chester Railway  opened  its  line  with  a  train  carrying 
600  passengers,  and  immediately  thereafter  began  to 
run  the  first  regular  passenger-trains. 

It  is  a  striking  fact  in  the  history  of  car  construc- 
tion that  the  English  invented  both  the  truck  and 
the  long  passenger-car  with  the  door  at  each  end ; 
and  that  these  forms,  once  invented,  were  almost 
immediately  discarded  in  England,  so  that  it  was 
left  for  this  country  to  reinvent  them  and  to  make 
them  the  distinguishing  features  of  American  car 
building  as  contrasted  with  English  construction. 
Indeed,  it  has  been  with  great  reluctance  that  we 
have  ceased  to  claim  them  as  original  discoveries. 

The  fact  that  passenger-trains,  by  displacing 
stages,  threw  out  of  use  many  of  those  vehicles, 
coupled  with  the  other  fact  that  the  stage  owners, 
submitting  to  the  inevitable,  often  became  railroad 
promoters,  furnishes  a  reason  why  the  early  masters 
of  transportation  both  used  the  stage-coach  body  as 
a  matter  of  economy,  and  also  built  their  new  cars 
on  the  model  in  which  the  conveniences  of  travel 


113 


114 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


had  been  most  highly  developed.  The  first  passen- 
ger-coach used  in  Pennsylvania  in  1832  was  a  stage- 
coach slightly  enlarged.  To  be  sure,  the  early  prints 
show  that  in  1830  Peter  Cooper's  first  locomotive 
hauled  an  open  boat-shaped  car  from  Baltimore  to 
Ellicott's  Mills,  on  the  Baltimore  and  Ohio  Rail- 
road ;  but  this  model  must  have  been  adopted  for 
economy's  sake,  because  in  1833  that  railroad  placed 
in  service  the  Ohio,  a  stage-coach  in  shape,  with  seats 
on  top  as  well  as  inside. 

As  President  Mendes  Cohen  well  observed  in  his 
address  before  the  American  Society  of  Civil  Engi- 
neers in  1892,  the  first  important  modifications  in 
car  building  were  called  forth  by  the  speed  devel- 
oped in  the  locomotive.  Naturally  the  wheels  first 
demanded  attention.  The  names  of  four  men 
are  connected  with  early  wheel  improvement.  Mr. 
Knight  improved  the  shape  of  the  tread  and  flange ; 
John  Edgar  and  Ross  Winans  developed  the  chilled 
features ;  and  Phineas  Davis  further  improved  and 
perfected  the  wheel  by  altering  the  disposition  of 
the  metal  in  the  tread  and  the  angle  of  the  flange, 
and  by  introducing  within  the  cast-iron  wheel  a 
wrought-iron  ring  of  five  eighths  or  three  quarters 
of  an  inch  round  iron,  which  both  perfected  the  chill 
and  also  added  strength  to  the  wheel.  Mr.  Winans's 
shops  turned  out  thousands  of  these  wheels  for  use 
not  only  in  this  country,  but  also  in  Germany  and 
Switzerland.  From  30,000  to  50,000  miles  repre- 
sented the  capabilities  of  a  Winans  wheel. 

With  increased  speed  came  the  need  for  increased 
steadiness,  and  it  occurred  to  Ross  Winans  that  by 
adopting  the  device  of  the  bogie,  or  swiveling  truck 
used  in  the  transportation  of  freight,  he  could  build 
an  easy-riding  passenger-car.  In  1833  Mr.  Winans 
constructed  three  long  houses  on  wheels,  each  capa- 
ble of  seating  sixty  passengers.  Having  patented 
his  invention,  he  was  confronted  by  the  fact  that  the 
principle  he  had  used  was  one  that  had  been  utilized 
frequently  on  tramways,  and  particularly  on  the 
famous  Quincy  granite  railroad,  built  to  transport 
stone  for  the  Bunker  Hill  Monument.  At  the  end 
of  protracted  litigation  the  courts  annulled  the 
patent. 

We  now  know  that  prior  to  1830  England  had 
three  bogie-engines  at  work;  that  in  1831  Stephen- 
son's  John  Bull,  built  for  the  Camden  and  Amboy 
road,  was  made  into  a  bogie  after  it  reached  this 
country— a  fact  made  patent  by  the  famous  run  of 
that  engine  from  New  York  to  Chicago  in  1893; 
that  Horatio  Allen  used  a  bogie-engine  on  the  South 
Carolina  Railroad  in  1832,  the  same  year  in  which 
the  bogie-locomotive  Experiment  was  built  for  the 


Mohawk  and  Hudson  Railroad.  Moreover,  the 
bogie  principle  was  patented  in  England  in  1812. 
Yet,  whatever  may  be  the  legal  aspects  of  the  case, 
it  is  certain  that  the  American  passenger-car  of  to- 
day originated  with  the  three  passenger-coaches 
built  in  Ross  Winans's  shops  in  1833.  England 
discarded  the  bogie  principle  for  engines  in  1830, 
and  did  not  return  to  it  until  1876 ;  and  that  coun- 
try to  this  day  has  not  adopted  the  bogie  for  passen- 
ger or  freight  cars.  In  1889,  the  Paris,  Lyons  and 
Mediterranean  Railway  adopted  the  bogie  for  cer- 
tain passenger-cars;  and  this  year  (1895)  the  Great 
Western  Railway  of  England  has  begun  to  experi- 
ment with  the  bogie-truck.  In  America  the  Winans 
passenger-coach  almost  immediately  supplanted 
everywhere  the  stage-coach  form,  which  England 
still  retains  in  a  modified  shape,  excepting  only  on 
the  Pullman  cars,  introduced  into  that  country  in 
1874.  With  us  not  only  the  passenger-cars,  but  the 
baggage,  mail,  and  freight  cars,  all  were  placed  on 
swiveling  trucks. 

That  the  early  railroads  of  this  country  were 
designed  to  carry  passengers  rather  than  freight  is 
to  be  seen  by  their  reports.  The  Baltimore  and 
Ohio  road,  from  January  i,  1831,  to  October  ist, 
carried  over  its  thirteen  miles  of  track  5931  tons  of 
freight  and  81,905  passengers;  and  so  late  as  1839 
the  Camden  and  Amboy  carried  only  13,520  tons 
of  merchandise  as  against  181,479  passengers.  In 
fact,  the  railways  as  freight  carriers  could  not  com- 
pete with  the  canals,  which  in  those  days  were  the 
traffic  routes.  In  1831  the  Tuscarora  and  Port 
Carbon  Railroad  could  not  meet  canal  rates  by 
thirty-nine  and  one  quarter  cents  per  ton,  the  railway 
charges  being  forty  cents,  plus  a  toll  of  fifteen  cents 
per  ton,  while  the  canal  rates  were  ten  and  three 
quarter  cents,  plus  five  cents  toll. 

Mr.  John  Kirby,  describing  from  memory  the 
freight-car  of  1848,  says  that  it  was  the  same  square 
box  it  is  to-day ;  its  capacity  was  from  six  to  ten 
tons ;  the  roof  was  covered  with  cotton  duck  painted 
and  sanded.  The  hot  sun  cracked  this  covering  and 
let  the  water  in  on  the  freight,  an  annoyance  com- 
mon also  to  passenger-coaches  of  that  day.  Few 
freight-cars  were  used  in  New  York  State  at  that 
date,  the  Erie  Canal  being  sufficient  for  summer 
freight.  Wood  was  the  universal  fuel,  so  there  was 
no  coal  transportation.  Wooden  brake-heads  were 
used,  and  it  required  three  men  to  turn  the  screw 
that  pressed  the  wheels  on  and  off  the  axles.  The 
ripping  of  planks  was  done  by  hand,  as  was  also  the 
dressing  up ;  and  when  one  man  had  tools  to  grind, 
a  fellow-workman  turned  the  stone.  Carpenters 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


119 


and  car  builders  of  six  years'  experience  commanded 
$1.12^  a  day  wages. 

Viewed  from  the  standpoint  of  to-day,  the  passen- 
ger-car of  the  early  fifties,  built  at  a  cost  of  about 
$2000,  was  a  combination  of  inconveniences.  The 
cast-iron  stove  in  the  center  of  the  car  broiled  those 
who  sat  immediately  around  it,  while  the  unfortu- 
nates one  seat  removed  from  its  satanic  glare  shivered 
and  froze.  In  summer  the  dust  was  intolerable,  and, 
notwithstanding  elaborate  devices  for  ventilation, 
the  dust  problem  did  not  begin  to  be  solved  before 
the  appearance  of  the  monitor  roof  in  1860.  Hot- 
water  heating  and  the  abolition  of  the  deadly  car- 
stove  came  with  the  Pullmans. 

In  1856,  Captain  (now  Sir)  Douglas  Gallon, of  the 
Royal  Engineers,  was  sent  to  America  to  investigate 
our  railways.  His  report  to  the  Lords  of  the  Privy 
Council  for  Trade  gives  a  straightforward  and  un- 
biased account  of  his  investigations.  Perhaps  there 
is  extant  no  other  report  which  so  comprehensively 
discusses  the  railway  situation  in  the  United  States 
about  that  date. 

"  The  practice  of  constructing  railways  [in  Amer- 
ica] in  a  hasty  and  imperfect  manner,"  says  Captain 
Gallon,  "  has  led  to  the  adoption  of  a  form  of  roll- 
ing stock  capable  of  adapting  itself  to  the  inequalities 
of  ihe  road ;  il  is  also  conslrucled  on  ihe  principle 
of  diminishing  ihe  useless  weighl  carried  in  a  Irain. 
The  principle  is  that  the  body  of  the  car  is  carried 
on  two  four-wheeled  trucks,  to  which  the  body  is 
attached  by  means  of  a  pintle  in  the  center,  the 
weight  resting  on  small  rollers  at  each  side.  The 
framing  of  the  truck  is  supported  on  springs  resting 
on  the  axles,  and  the  pinlle  and  rollers  are  fixed  lo 
a  cross-beam,  which  is  attached  by  springs  to  the 
main  framing ;  so  thai  belween  ihe  body  of  ihe  car 
and  ihe  axles  are  a  double  sel  of  springs.  India- 
rubber  springs  are  in  general  use,  bul  ihey  oflen 
become  hard ;  consequenlly  somelimes  sleel  springs 
are  used,  wilh  greal  advanlage.  Any  side  move- 
menl  which  mighl  resull  from  Ihe  slight  play  allowed 
to  ihe  cross-beam  is  counteracted  by  springs  placed 
between  its  ends  and  the  framing.  An  iron  hoop 
attached  lo  Ihe  framing  passes  under  Ihe  axle  on 
each  side,  so  as  to  support  the  axle  in  case  it  should 
break." 

The  bearings  Captain  Gallon  found  nol  unlike 
those  used  in  England,  bul  the  use  of  oil  as  a  lubri- 
cator was  novel.  He  was  told  that  under  favorable 
circumstances  the  oil  in  an  axle-box  needed  to  be 
renewed  but  once  a  month ;  but  thai  it  was  difficult 
to  oblain  good  oil.  The  wheels  were  of  cast-iron, 
with  chilled  tires ;  they  were  from  ihirty  lo  ihirly-six 


inches  in  diameter,  weighed  rather  more  than  500 
pounds,  and  were  without  spokes.  When  made  by 
the  best  makers  they  would  run  from  60,000  to 
80,000  miles  before  the  tires  were  worn,  and  they 
cost  from  ^3  to  ^3  los.  each.  The  iron  used  in 
making  wheels  was  of  very  superior  quality ;  and  so 
great  was  the  practical  skill  required  that  but  three 
firms  in  the  United  Stales  could  be  relied  on  to 
furnish  wheels  of  the  firsl  grade. 

The  mosl  approved  form  of  draw-bar  was  contin- 
uous under  the  car,  and  was  attached  to  the  elliplic 
springs,  acling  in  both  direclions.  The  iron  shackle 
was  in  general  use,  bul  some  railways  preferred  an 
oak  shackle  eighleen  inches  long,  two  inches  thick, 
and  six  inches  broad.  This  block  was  bound  with 
an  iron  band  divided  on  each  side  at  the  center,  so 
thai  a  car  on  leaving  Ihe  rails  would  break  the 
shackle  transversely. 

Already  the  automalic  coupler  for  freighl-cars 
was  prefigured  in  a  device  by  which  ihe  pin  in  ihe 
bumper  of  one  of  ihe  cars  was  supported  by  means 
of  a  ball,  so  that  the  shackle  of  Ihe  on-coming  car 
pushed  back  Ihis  ball  and  lei  ihe  pin  fall  inlo  ils 
place.  All  passenger-cars  and  most  freight-cars 
were  supplied  with  brakes;  and  the  Philadelphia 
and  Reading  Railroad  was  endeavoring  to  anticipale 
ihe  day  of  train-brakes  by  an  invenlion  whereby 
a  sudden  check  in  ihe  speed  of  ihe  engine  applied 
the  brakes  lo  ihe  wheels  of  all  ihe  cars.  The 
saloon,  the  car-stove,  and  ihe  ice-water  tank  all  had 
established  ihemselves  in  Ihe  besl  cars,  and  were 
novelties  to  the  visiting  Englishman. 

On  the  Illinois  Central,  between  Cairo  and 
Dubuque,  some  of  the  cars  were  filled  with  com- 
parlmenls  in  which  ihe  backs  of  seats  turned  up  and 
so  formed  two  tiers  of  berths  or  sofas,  for  Ihe 
accommodalion  of  persons  who  mighl  wish  lo  lie 
down  and  were  willing  to  pay  for  the  privilege. 
The  passenger-car  had  atlained  a  lenglh  of  sixty 
feet,  though  the  thirty  and  forty-five  foot  cars  were 
more  common ;  the  baggage-cars,  with  their  com- 
partments for  mail  and  express,  were  thirty  feet  long, 
and  the  freight-cars  from  twenty-eighl  to  thirty  feet. 
In  those  days  the  freighl-cars  were  conslrucled  more 
strongly  lhan  were  the  passenger-coaches ;  a  Balti- 
more and  Ohio  freight-car  twenty-eighl  feet  long, 
and  with  a  capacity  of  nine  tons,  itself  weighed  six 
tons. 

In  summing  up  the  result  of  his  observations  as 
lo  ihe  rolling  slock  in  this  country,  Captain  Gallon 
notes  thai  ihe  Americans  appear  to  have  taken  their 
ideas  more  from  a  ship  than  from  an  ordinary  car- 
riage, and  to  have  adopted  the  form  best  calculated 


116 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


to  accommodate  large  masses,  with  a  minimum  of 
outlay  for  first  cost;  and  that  while  the  cars  had 
been  designed  with  a  view  to  avoid  every  appear- 
ance of  privilege  or  exclusiveness,  or  of  superiority 
of  one  traveler  over  another,  they  had  been  con- 
structed so  as  to  secure  to  every  traveler  substantial 
comfort  and  even  privacy. 

"  There  is  but  one  class,"  he  said ;  "  but  as  the 
cars  are  designed  with  more  regard  to  comfort  than 
English  railway  carriages,  this  class  is  much  superior 
to  our  second  and  third  classes,  and  is  inferior  only 
to  the  best  first-class  English  carriages.  Notwith- 
standing the  superior  comfort  of  the  American  rail- 
ways, the  rates  of  fare  averaged  lower  than  the 
second  and  sometimes  even  the  third-class  fares  in 
England." 

Of  necessity  progress  in  car  building  had  to  wait 
for  the  development  of  the  railroads.  The  original 
roads  were  not  constructed  as  through  lines  between 
the  larger  cities,  but  as  the  connecting-links  between 
natural  waterways,  answering  to  the  portages  or 
carrying  places  of  the  old  days  when  commerce  was 
conducted  in  canoes.  Often  built  as  the  result  of 
local  or  State  enterprise,  a  short  line  was  sufficient 
to  use  up  the  scanty  capital  available,  or  to  exhaust 
the  willingness  of  the  people  to  be  taxed  for  public 
improvements.  The  great  systems  of  to-day  repre- 
sent survivals  of  the  fittest  early  ventures,  and  de- 
velopment according  to  environment.  Thus  the 
various  small  roads  which  traversed  the  present 
main  line  of  the  New  York  Central  were  not  con- 
solidated until  1853,  and  the  same  year  the  roads 
between  Philadelphia  and  Pittsburg  came  under  one 
control.  So  late  as  1862  there  were  five  separate 
companies  operating  the  lines  between  Lake  Erie 
and  Lake  Michigan ;  and  as  each  road  had  a  gauge 
of  its  own,  it  was  regarded  as  a  triumph  in  car  con- 
struction when  freight-cars  of  compromise  gauge 
were  built  to  run  over  all  five  roads.  In  1869, 
however,  the  Lake  Shore  and  Michigan  Southern 
lines  came  under  a  single  head. 

When,  in  October,  1865,  a  combination  was 
formed  among  eight  railroads  to  establish  a  fast 
freight  line  between  New  York  and  Boston  and 
Chicago,  the  maximum  difference  in  the  gauges  of 
the  several  lines  was  one  inch ;  and  this  was  com- 
pensated for  by  a  broad  tread-wheel.  Each  com- 
pany contributed  a  number  of  cars  proportionate  to 
its  mileage,  one  car  for  every  three  (afterward  in- 
creased to  one  for  every  two)  miles.  In  1865  the 
quota  of  the  Lake  Shore  and  Northern  Indiana  was 
179  cars;  while  in  1894  that  road's  quota  of  Red 
Line  cars  was  2200. 


In  1862  the  United  States  government  conducted 
the  greatest  railroad  business  known  up  to  that  time. 
With  headquarters  at  Nashville,  the  government 
operated  1500  miles  of  road  with  18,000  men, 
whose  monthly  wages  amounted  to  $2,200,000. 
The  rolling  stock  consisted  of  271  engines  and  3000 
cars.  No  entirely  new  locomotives  were  built,  but 
the  3000  men  employed  in  the  locomotive  repair- 
shops  pieced  out  fully  equipped  engines  founded  on 
a  serviceable  boiler  or  a  pair  of  sound  driving- 
wheels.1  Among  the  triumphs  of  the  national  car- 
shops  were,  first,  a  headquarters  car  for  General 
Thomas,  the  car  being  fifty  feet  long,  iron-plated, 
and  provided  with  a  kitchen,  a  dining-room,  a  sleep- 
ing apartment,  and  an  office ;  and,  secondly,  the 
hospital-trains,  in  which  the  jars  and  jolts  were 
reduced  to  a  minimum.  It  was  during  the  year 
1864  that  General  McCallum  and  Colonel  Wyman 
came  to  Detroit  and  summoned  the  managers  of  the 
Michigan  Car  Company  to  stop  all  building  then  in 
progress  and  to  work  solely  for  the  government. 
They  gave  a  contract  for  a  number  of  box  and  flat 
cars  to  be  operated  on  Southern  roads;  and  inas- 
much as  the  gauge  differed  from  that  of  the  North- 
ern roads,  the  new  cars  were  loaded  on  flat  cars  and 
sent  to  Cincinnati.  The  government  officials  fixed 
the  price  of  the  cars  and  made  payment  in  certifi- 
cates, some  of  which  the  company  exchanged  for 
materials,  and  the  remainder  were  held  until  money 
could  be  obtained  for  them. 

The  enormous  transportation  business  developed 
by  the  war,  together  with  the  labor  conditions  and 
the  paper-money  issues,  combined  to  raise  the  price 
of  cars;  so  that  the  standard  freight-car  of  1864,  a 
car  twenty-eight  feet  long  and  with  a  capacity  of 
ten  tons,  cost  $1000  or  more.  To-day  a  car  thirty- 
four  feet  long,  with  a  capacity  of  thirty  tons,  and 
provided  with  automatic  couplers,  air-brakes,  and 
other  improvements,  can  be  purchased  for  about 
$500. 

When  the  war  ended  the  managers  of  railways 
were  called  on  to  face  a  heavy  decline  in  both 
freight  and  passenger  traffic,  due  to  the  disbanding 
of  the  armies.  Money  was  not  plenty,  cars  were 
very  expensive,  and  the  mania  for  extending  lines 
into  new  territory  had  begun.  Under  these  condi- 
tions the  roads  began  a  system  of  borrowing  cars 
from  the  builders  or  from  car- trust  companies.  My 
impression  is  that  the  Michigan  Car  Company  was 
the  first  to  make  contracts  on  a  car-loaning  basis; 
be  that  as  it  may,  this  company  had  at  one  time 

1  "  Development  of  Transportation  Systems  in  the  United 
States,"  by  J.  L.  Ringwalt  (1888).  p.  210. 


JAMKS  MCMILLAN. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


117 


loaned  to  railroads  between  6000  and  7000  cars, 
payment  being  made  according  to  the  car's  mileage. 
With  better  times  and  better  credit  the  roads  began 
to  buy  cars  for  cash  or  on  long  time,  as  was  most 
convenient ;  and  loaning  freight-cars  to  railroads  on 
a  mileage  basis  practically  has  been  discontinued. 
A  majority  of  the  refrigerator-cars,  however,  are  still 
owned  by  private  parties,  and  are  run  on  a  mileage 
basis.  The  recent  reduction  in  the  mileage  rate  from 
three  fourths  to  three  fifths  of  a  cent  has  practically 
killed  the  business  of  private  ownership,  since  the 
new  rate  does  not  much  more  than  pay  for  the  re- 
pairs. 

The  sleeping-car  had  its  beginnings  as  early  as 
1838.  The  Baltimore  "Chronicle"  for  October 
jist  of  that  year  described  one  such  car  that  had 
been  put  on  the  line  between  Baltimore  and  Phila- 
delphia. The  enthusiastic  reporter  related  that  the 
car  had  berths  for  twenty-four  persons,  and  that  for 
a  small  consideration  the  weary  passenger  might 
spend  the  six  hours  of  travel  between  those  cities 
as  pleasantly  as  if  he  were  asleep  in  his  own  bed. 
Nothing  then  seemed  to  be  wanting  except  dining- 
cars,  and  those  were  promised  for  the  near  future — a 
promise,  alas !  not  fulfilled  for  many  a  long  year. 

Twenty  years  later,  in  1858,  George  B.  Gates 
invested  $5000  in  two  sleeping-cars  to  run  between 
Cleveland  and  Buffalo ;  but  passengers  could  not  be 
persuaded  to  use  them.  The  same  year  the  line 
between  Toledo  and  Chicago  was  equipped  with 
two  sleeping-cars  built  by  the  Wason  Company, 
of  Springfield,  Mass.,  and  owned  by  Mr.  Bates, 
of  Utica,  N.  Y.  These  cars  were  fifty  feet  long, 
with  sixteen  sections  in  summer  and  fourteen  in 
winter.  When  not  in  use,  the  bedding  and  curtains 
were  stored  in  an  end  section ;  and  a  single  wash- 
basin and  one  saloon  furnished  the  toilet  conve- 
niences for  the  forty-eight  persons  the  car  was 
expected  to  carry.  A  sofa  along  the  side  of  the  car 
formed  the  lower  berth,  the  middle  one  was  hinged 
to  the  window-casing,  and  the  upper  berth  rested 
on  cleats  fastened  to  permanent  cross-partitions. 
It  was  while  traveling  in  one  of  these  cars,  in  1858, 
that  Mr.  George  W.  Pullman  began  to  plan  the 
sleeping-cars  that  have  revolutionized  railway  travel 
in  this  country,  and  are  making  their  way  in  Europe, 
where  comfort  is  less  an  essential  to  the  traveler 
than  it  is  in  America. 

In  1859  Mr.  Pullman  transformed  two  Chicago 
and  Alton  coaches  into  better  sleeping-cars  than  any 
others ;  but  it  was  not  until  1 863  that  the  Pioneer, 
the  first  Pullman,  was  placed  on  the  road.  The  car 
cost  $18,000 — an  astounding  price  in  those  days. 


It  was  higher  and  wider  than  most  roads  could  admit, 
and  it  was  not  until  President  Lincoln's  funeral  that 
the  roads  between  Chicago  and  Springfield  nar- 
rowed their  platforms  and  adapted  their  bridges  so 
as  to  allow  the  Pioneer,  carrying  the  funeral  party, 
to  pass  over  their  lines.  Shortly  afterward  General 
Grant's  trip  from  Detroit  to  Galena,  111.,  in  the 
same  car,  opened  those  lines  to  the  Pioneer.  After 
that  time  progress  was  rapid.  The  Pullman  Com- 
pany was  organized  in  1867,  and  its  success  is  too 
well  known  to  need  comment  here.  From  the 
palace  sleeping-car  to  the  parlor  and  the  dining- 
room  car  is  a  short  step.  But  a  long  jump  was 
taken  in  the  vestibule,  invented  by  Mr.  Pullman  in 
1887,  by  which  trains  are  made  solid  and  the  plat- 
form is  robbed  of  the  last  of  its  terrors. 

In  the  winter  of  1868-69  the  &Kl  Westinghouse 
air-brake  was  used  on  the  Steubenville  accommoda- 
tion train  running  on  the  Pittsburg,  Cincinnati,  and 
St.  Louis  Railroad.  The  Pennsylvania  road  adopted 
it,  and  since  the  automatic  feature  was  added,  in 
1873,  it  has  come  into  almost  universal  use  on  pas- 
senger-trains, while  by  far  the  larger  proportion  of 
new  freight-cars  built  are  equipped  with  it.1  In  1887 
a  train  of  fifty  freight-cars  made  a  triumphal  tour  of 
the  great  lines,  and  by  repeated  tests,  under  varying 
conditions,  proved  that  the  Westinghouse  brake  can 
stop  a  train  in  one  tenth  the  space  required  by  the 
hand-brake.  In  1867  Colonel  Miller  placed  his  pat- 
ent platform,  buffer,  and  coupler  on  three  cars  build- 
ing in  the  shops  at  Adrian,  Mich. ;  and  with  great 
rapidity  the  dangerous  old  platform,  with  its  loose 
link-coupling,  disappeared.  In  1860  the  Post-Office 
Department  began  to  demand  more  room  from  the 
railroad  companies,  and  year  by  year  the  mail-cars 
were  increased  from  seventeen  to  twenty  feet  in 
length,  then  to  thirty-five,  and  finally  to  sixty  feet. 
The  "  Fast  White  Mail "  now  requires  two  trains 
each  way  between  New  York  and  Chicago.  Each 
train  is  made  up  of  six  mail-cars,  and  the  second 
train  leaves  New  York  three  hours  before  the  first 
train  reaches  Chicago. 

The  interchange  of  cars  among  the  various  roads 
made  it  necessary  to  adopt  standards  in  car  con- 
struction, in  order  to  facilitate  repairs  to  cars  when 
away  from  the  home  road.  Some  authority,  too, 
was  needed  to  settle  disputes  between  roads,  arising 
from  charges  for  repairs ;  to  investigate  new  brakes 
and  couplers ;  and,  in  general,  to  keep  the  work  of 
construction  fully  abreast  of  the  times.  The  Master 
Car  Builders'  Association,  organized  in  1867,  amply 

1  Out  of  331,094  freight-cars  fitted  with  train-brakes  up  to 
June  30,  1894,  315,729  had  the  Westinghouse  brake. 


118 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


fills  this  need ;  and  the  reports  of  its  annual  meetings 
contain  the  latest  word  on  all  subjects  relating  to 
car  building.  Its  arbitration  committee  also  acts  as 
a  court  of  conciliation  for  the  various  roads. 

Few  railroads  in  this  country  build  their  own  cars, 
most  roads  finding  it  cheaper  to  buy  of  car  com- 
panies, and  to  confine  their  own  work  to  repairs. 
There  are  some  exceptions.  The  Pennsylvania  Com- 
pany, which  is  a  large  purchaser,  in  1894  built  1963 
cars  to  replace  its  worn-out  and  damaged  equipment, 
besides  repairing  66,437.  The  maximum  capacity 
of  the  Pennsylvania  shops  is  twenty-eight  cars  a  day, 
or  about  one  half  that  of  the  largest  works  not  con- 
ducted by  a  railway  company.1  In  June,  1 894,  there 
were  in  the  United  States  33,018  passenger  and  i,- 
205,169  freight  cars,  besides  39,891  cars  used  in  the 
service  of  the  roads,  and  also  the  privately  owned 
cars.  Of  the  freight-cars,  25.20  per  cent,  are  fitted 
with  train-brakes,  and  27.23  per  cent,  with  auto- 
matic couplers. 

Prior  to  the  panic  of  1873  all  the  car- works  were 
busy.  That  panic  caused  the  failure  of  a  large 
number  of  new  railroads,  which,  in  turn,  forced  into 
bankruptcy  and  eventual  reorganization  many  car 
companies.  From  1873  to  1879  the  car-shops 
throughout  the  country  were  practically  idle;  but 
with  the  revival  of  business  in  1878-79  the  car- works 
again  became  busy,  and,  with  the  exception  of  a 
slight  dullness  in  1883-84,  did  a  large  and  profitable 
business  until  1893.  The  effect  of  the  recent  busi- 

1  "  Railway  Car  Journal,"  March,  1895. 

2  These  figures  are  only  for  cars  built  by  companies  re- 
porting their  output,  and  the  statements,  therefore,  are  com- 
parative. 


ness  depression  on  car  building  may  easily  be  seen 
from  the  fact  that  in  1890,  103,000  freight-cars  were 
built  by  fifty  companies ;  in  1893  the  output  of  forty- 
three  companies  was  only  51,216  cars  ;  and  in  1894 
the  twenty-seven  companies  operating  their  plants 
turned  out  17,029  cars.  Fifteen  companies  that 
built  3000  freight  and  300  passenger  cars  in  1893 
built  not  a  single  car  in  1 894.2  The  seventh  annual 
report  of  the  Inter-State  Commerce  Commission  is 
authority  for  the  statement  that  the  increase  in  the 
total  number  of  cars  during  the  fiscal  year  1 894  was 
but  4132,  as  against  58,854  in  1893.  With  the  re- 
vival of  business  the  car  companies  are  again  start- 
ing up.  The  average  life  of  a  freight-car  being  from 
fourteen  to  twenty  years,  at  least  75,000  cars  must 
be  built  each  year  to  repair  the  ravages  of  time ;  be- 
sides the  cars  required  to  make  good  the  losses  by 
accidents  and  for  the  increase  in  mileage  and  busi- 
ness. 

The  transportation  of  various  kinds  of  products, 
such  as  live-stock,  dressed  meat,  oil,  and  timber, 
has  called  into  being  cars  especially  adapted  to  each 
class  of  freight,  so  that  scores  of  different  kinds  of 
cars  are  now  constructed  to  answer  the  demands  of 
the  shippers.  Within  the  past  year  electricity  has 
been  used  as  a  motive  power  for  both  freight  and 
passenger  cars,  and  possibly  in  the  future  each 
freight-car  will  be  equipped  with  an  overhead  trolley 
whereby  it  can  move  independently  of  the  train  on 
branch  roads  and  for  switching  purposes.  At  all 
events,  if  the  future  is  to  be  judged  by  the  past, 
great  changes  in  transportation  are  likely  to  come 
suddenly,  and  to  secure  wide-spread  adoption  in  the 
minimum  of  time. 


CHAPTER   XVIII 

AMERICAN   SHIP   BUILDING 


THE  revival  of  American  shipping  has  been 
scarcely  more  than  a  hope  of  the  American 
people  for  more  than  thirty  years.  By  a 
revival  of  this  industry  is  meant  the  reappearance, 
in  frequent  and  constantly  increasing  numbers,  of 
American-built  ships  for  our  commerce  with  other 
nations,  rather  than  for  our  own  internal  or  coast- 
wise trade.  This  has  been  a  theme,  and  more  or 
less  a  dream,  for  statesmen,  capitalists,  manufactur- 
ers, and  all  patriotic  citizens.  All  have  recognized 
that  complete  national  independence  without  a  mer- 
chant marine  proportionate  to  our  standing  as  a 
nation  is  impossible.  All  thoughtful  citizens  under- 
stand that,  so  far  as  our  foreign  commerce  is  con- 
cerned, we  are  to-day,  as  we  have  been  for  a  long 
time,  practically  in  subjection  to  the  trade  impulses 
of  Great  Britain.  If  England  should  place  an  em- 
bargo upon  us  we  should  be  practically  helpless — 
for  a  considerable  time,  at  least — in  our  trade  with 
other  nations.  All  agree  that  American  shipping 
should  be  revived.  It  is  as  to  the  best  method  of 
reviving  it  that  we  disagree.  There  can  be  no 
doubt  that  this  disagreement  has  been  a  national 
misfortune. 

The  creation  of  a  new  navy,  or,  strictly  speaking, 
the  beginning  of  a  new  navy,  and  the  recent  build- 
ing of  two  notable  specimens  of  marine  architecture 
for  the  transatlantic  trade,  have  caused  many  per- 
sons to  think,  and  a  few  to  assert,  that  the  revival  has 
come  already.  Every  one  wishes  that  this  were 
true.  The  fact  is,  these  are  simply  indications  of  a 
revival  of  this  splendid  art  and  trade.  We  have 
shown  most  emphatically  in  the  last  ten  years  that 
we  can  not  only  build  ships  equal  to  the  best  of 
foreign  construction,  but  actually  superior  to  them, 
ship  for  ship,  in  finish  and  in  results.  Moreover, 
we  have  so  wonderfully  progressed  in  these  ten 
years  that  we  can  now  actually  build  ships  at  only 
a  trifle  more  in  first  cost  than  the  most  progressive 
of  foreign  ship  builders. 


Nevertheless  we  cannot  say  truthfully  that  Amer- 
ican ship  building  has  revived.  As  a  people  we 
have  risen  to  a  height  from  which  we  can  see  the 
promised  land.  We  have  yet  to  enter  into  it.  Ex- 
cept for  the  creation  of  this  new  navy,  dnd  for  the 
insistence  of  such  men  as  Secretaries  Whitney  and 
Tracy,  of  our  Navy  Department,  that  our  war-ships 
should  be  entirely  of  American  make,  notwithstand- 
ing that  at  first  they  would  cost  more  than  if  we  had 
them  built  in  England,  the  ship-building  industry  of 
this  country  for  foreign  trade  would  be  practically 
paralyzed  to-day.  The  most,  therefore,  that  can  be 
said  is  that  we  can  now  build  our  own  ships,  and 
that  manufacturers  are  ready  at  any  minute  to  enter 
upon  the  work.  This  of  itself  is  a  tremendous  gain, 
and  is  the  first  step — the  one  of  greatest  importance, 
perhaps — toward  the  completion  of  our  indepen- 
dence of  all  other  nations.  The  situation  is,  there- 
fore, one  of  promise. 

Ship  building  began  in  this  country  in  the  earliest 
colonial  times.  It  was  fairly  well  established  in 
New  England  in  1640.  It  began  on  the  Delaware 
in  1683.  The  conflicts  in  Europe  made  it  neces- 
sary for  the  early  Americans  to  build  their  own  ves- 
sels. The  industry  had  its  vicissitudes,  like  the  col- 
onists themselves,  for  a  century.  In  1 740,  however, 
New  England  had  no  less  than  1000  sail  in  the 
fishing  trade.  In  1770  Massachusetts  built  nearly 
one  half  of  the  American  ships.  At  the  beginning 
of  the  Revolution  the  American  tonnage  amounted 
to  398,000.  It  comprised  nearly  one  third  of  Great 
Britain's  entire  tonnage.  Philadelphia  had  then 
come  to  be  the  leading  center  of  the  industry  here. 
The  trade  of  this  country  was  then  largely  with  the 
West  Indies,  and  Philadelphia  was  a  most  accessible 
port  for  the  products  of  those  islands. 

In  1793  Philadelphia  built  double  the  number  of 
ships  that  any  other  place  in  the  United  States  fur- 
nished. In  1800  the  tonnage  of  American  shipping 
was  put  down  at  669,921.  The  War  of  1812  caused 


119 


120 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


a  sharp  decline,  but  in  1815  there  came  a  great  re- 
vival. It  dropped  in  1820,  and  recovered  somewhat 
in  1830.  In  1835  it  went  lower  than  for  any  other 
year  of  the  century,  but  forthwith  there  came  the 
greatest  time  of  prosperity  in  the  industry,  which 
culminated  in  1 8  5  5 .  The  tonnage  for  representative 
years  of  these  periods  is  recorded:  1820,  47,784; 
1830,58,094;  1835,46,238;  1845,146,018;  1850, 
272,218;  1855,  583,450. 

Then  came  the  decline  for  twenty  years.  It  was 
about  as  rapid  as  the  increase  for  twenty  years  had 
been.  In  1855  we  built  381  ships  and  barks,  and 
126  brigs.  In  1875  we  built  114  ships  and  barks, 
and  22  brigs.  In  1885  we  built  n  ships  and 
barks,  and  no  brigs.  We  built  no  steamers  for  for- 
eign trade.  The  last  census  showed  that  there  were 
more  than  1000  ship-building  plants  in  the  United 
States.  Most  of  them  were  small  affairs.  They 
were  occupied  in  building  all  sorts  of  craft  for  our 
own  waters,  chiefly  for  the  large  landlocked  com- 
merce of  our  lakes,  and,  of  course,  scarcely  enter, 
so  far  as  their  product  is  concerned,  into  a  consid- 
eration of  the  revival  of  American  shipping  as  it  is 
commonly  understood. 

There  should  be  little  need  to  recount  the  causes 
for  the  decline  in  this  country  of  this  noble  indus- 
try. Nature  intended  us  to  be  a  seafaring  people, 
and  for  eighty  years  we  were  such.  In  the  begin- 
ning of  this  century  we  not  only  surpassed  other 
nations  in  the  quality  of  our  ships,  but  we  could 
build  them  cheaper  than  England  could  build  her 
vessels.  We  had  splendid  forests  and  hardy,  fear- 
less sailors.  Year  by  year  we  increased  our  output 
in  this  industry,  so  that  when  the  decade  from  1850 
to  1860  was  reached  we  were  second  in  rank  in  this 
industry,  and  in  1860  so  close  to  England  that  there 
was  practically  no  difference  between  the  two 
nations.  Soon  after  the  year  1840,  however,  Eng- 
land's forests  had  begun  to  show  serious  depletion. 
It  became  necessary,  after  a  time,  for  her  to  import 
the  greater  part  of  her  materials  for  building  ships. 
Tools  were  then  invented  for  the  working  of  iron 
for  ship  building.  She  had  plenty  of  iron  in  her 
hills,  and  forthwith  the  iron  ships  began  to  appear, 
slowly  at  first,  but  none  the  less  surely  and  steadily. 

There  was  no  such  incentive  in  this  country  for 
iron  ships,  the  feasibility  of  which  had  been  demon- 
strated for  forty  years  or  more.  Our  forests  were 
still  plentiful  and  close  at  hand.  Our  experience 
with  wooden  ships  had  been  profitable.  The  indus- 
try was  increasing  all  the  time.  There  was  little 
need  for  a  drastic  change  in  our  system  of  manu- 
facture. The  gold  fever  was  upon  us,  and  the  tide 


of  immigration  was  sweeping  to  our  shores  in  a 
mighty  current.  There  was  no  time  for  any  change 
in  our  methods,  even  had  we  been  inclined  to  make 
one.  From  a  fleet  of  201,562  tonnage  in  1789,  we 
had  grown  to  a  fleet  of  5,353,868  tonnage  in  1860. 
In  the  latter  year,  the  entire  tonnage  of  the  whole 
British  empire  was  only  5,710,968.  Truly  an  im- 
pressive showing  was  ours. 

The  Civil  War  came.  For  a  time  our  shipping 
showed  no  marked  decline.  Then  it  began  to  go 
down.  The  Confederate  privateers,  built  in  Eng- 
land, began  to  sweep  the  seas.  American  ships 
with  hundreds  of  thousands  of  tonnage  sought  the 
English  flag  for  protection.  Year  by  year  we  built 
fewer  ships.  When  the  war  ended  we  had  practi- 
cally ceased  to  be  a  maritime  nation.  We  were  at 
the  threshold  of  a  magnificent  interior  development 
of  our  own  country.  Our  capitalists  could  not  begin 
to  furnish  the  money  needed  in  this  work.  We 
had  to  go  to  England,  even  as  we  have  been  doing 
in  recent  years,  to  borrow  money  to  build  the  in- 
tricate and  amazing  network  of  our  railroads.  New 
methods  had  come  into  the  ship-building  industry. 
The  business  had  become  revolutionized.  Eng- 
land had  taken  full  advantage  of  her  opportunity. 
She  had  fostered  the  industry  by  placing  her  govern- 
ment work  in  private  yards.  Her  plants  had  been 
established  on  a  broad  scale,  and  a  resulting  cheap- 
ening in  cost  of  production  had  followed.  The 
United  States  was  out  of  the  race.  Her  forests 
near  the  coasts  were  depleted.  When  we  built  our 
first  battle-ship,  the  New  Ironsides,  in  1 863,  the  tim- 
bers used  in  her  were  cut  within  twenty-five  miles 
of  Philadelphia.  The  great  interior  development  of 
the  country  had  swept  all  such  forest  supplies  away. 
Labor  was  costly.  This  made  the  product  of  our 
iron-mines  most  expensive,  and  as  a  people  we  found 
that  one  of  the  results  of  the  great  Civil  War  was 
the  destruction  of  our  shipping  industry,  and,  de- 
plorable as  it  well  may  seem,  and  not  yet  fully 
understood  by  all  our  people,  we  were  commercially 
dependent  once  more  upon  Great  Britain.  The  ris- 
ing cloud  of  our  internal  prosperity  hid  this  from  the 
eyes  of  most  of  our  people,  but  fact  it  was  and  is 
nevertheless. 

England  had  become  mistress  of  the  seas.  With 
an  eye  single  to  her  commercial  interests — at  once 
the  explanation  of  all  her  statecraft— she  resolved  to 
maintain  her  supremacy.  To-day  she  is  as  resolute 
in  her  purpose  as  she  was  thirty  years  ago.  Her 
shipping  is  the  sign  whereby  she  conquers  in  the 
mercantile  world.  It  is  the  standing  proof  of  her 
national  prowess  and  independence.  With  keen 


CHARLES  H.  CRAMP. 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


121 


foresight  she  resolved  that  this  conquering  industry 
should  not  become  stagnant.  She  enrolled  certain 
of  the  steam-craft  in  the  reserve  force  of  her  navy, 
paying  the  yearly  rate  of  twenty  shillings  per  ton  to 
their  owners.  She  established  liberal  subsidies  for 
carrying  the  mails.  She  recognized  that  a  ship 
carrying  the  British  flag  was  something  more  than 
the  private  property  of  the  individual  owner.  The 
nation  had  a  share  of  ownership  in  every  such 
vessel. 

Recognizing  that  this  country  could  never  have 
complete  national  independence  without  a  merchant 
marine,  American  capitalists  in  1870  decided  to 
make  a  start  in  bringing  about  a  revival.  Four 
vessels  were  built  for  the  transatlantic  trade  in  the 
Cramp  shipyard.  They  were  the  Ohio,  Indiana, 
Pennsylvania,  and  Illinois.  They  were  equal  to  any 
vessels  of  their  day,  and  a  credit  to  the  industry  and 
to  the  nation.  England  met  their  advent  with  in 
creased  subsidies.  The  American  vessels  had  no 
such  aid,  and  had  to  fight  their  way  in  commercial 
rivalry.  It  was  not  a  winning  fight.  Ship  building 
here  was  confined  thereafter  to  building  coastwise 
vessels.  The  industry  sank  to  such  a  low  stage  that 
when,  in  1882,  we  started  to  build  a  new  navy,  the 
English  newspapers  scoffed  at  the  idea  that  we  could 
produce  either  hulls  or  engines.  They  finally  ad- 
mitted that  we  could  build  the  hulls,  but  for  us  to 
make  the  complex  modern  marine  engine  was  out  of 
the  question.  Congress  gave  the  Secretary  of  the 
Navy  power  to  get  abroad  what  he  wanted  in  this 
respect,  but  Messrs.  Whitney  and  Tracy  resolutely 
refused  to  take  advantage  of  the  privilege. 

When  we  started  in  this  work  of  building  a  navy 
we  had  no  mills  in  which  to  roll  the  plates,  no 
foundries  to  make  the  great  castings,  no  forges  to 
fashion  the  shafts  and  gun  forgings,  no  plants  to 
supply  our  armor.  It  had  taken  England  thirty 
years  or  more  to  equip  herself  with  these  appliances. 
What  have  we  done?  In  ten  years,  practically,  we 
have  gone  to  the  front.  Our  marine  engines  and 
boilers  are  and  for  years  have  been  confessedly  the 
best  in  the  world.  Not  one  of  our  new  war-ships 
has  broken  down  when  put  to  a  test  of  four  hours' 
work  at  its  maximum  power,  and  none  has  been  in- 
jured in  the  slightest  by  such  an  enormous  trial  of 
endurance.  On  the  contrary,  no  English  war-ship 
has  been  equal  to  such  a  task.  The  English  experts 
freely  admit  that  we  have  won  supremacy  in  this  re- 
spect. Our  ships  are  acknowledged  to  be  superior 
in  finish.  There  is  one  simple  explanation  for  this : 
workmen  in  American  shipyards  get  nearly  double 
the  wages  of  workmen  in  English  shipyards,  and  a 


better-paid  man  always  does  better  work.  Our 
designers  have  made  distinct  advances  over  their 
English  competitors.  The  Indiana  class  of  battle- 
ships proves  this.  With  vessels  only  two  thirds  the 
size  of  the  English  Royal  Sovereign  class,  the  Indiana 
class  has  a  greater  fighting  capacity  and  as  much 
speed  and  endurance.  Moreover,  the  recent  trial  of 
the  Indiana  herself  demonstrated  that  she  was  a  signal 
success  in  the  one  respect  where  English  ships  fail 
oftenest,  the  matter  of  stability.  Lack  of  stability 
has  been  the  crowning  fault  of  foreign  battle-ships. 
No  steadier  ships  will  float  than  these  new  battle- 
ships of  ours. 

In  addition  to  all  this,  we  have  produced  the  two 
fastest  war-ships  of  large  size  in  the  world,  the  Co- 
lumbia and  Minneapolis.  England  became  aroused 
by  their  appearance,  and  she  answered  our  success 
by  ordering  two  vessels  of  stupendous  dimensions, 
the  Powerful  and  Terrible,  for  the  sole  purpose  of 
outclassing  them.  The  creation  of  this  new  navy 
has  stimulated  ship  building  in  many  yards.  On  the 
Pacific  coast,  in  New  England,  in  Maryland,  even 
on  the  Mississippi  River,  as  well  as  on  the  historic 
Delaware,  we  have  proved  our  ability  to  compete 
with  all  the  world  in  the  making  of  ships  of  every 
kind.  Our  mills  and  forges  and  foundries  cannot  be 
surpassed  anywhere,  and  a  striking  triumph  of  our 
skill  is  shown  by  the  fact  that  Russia  has  recently 
placed  two  orders  for  armor  in  this  country,  to  the 
exclusion  of  all  the  plants  of  Europe. 

Our  skill  had  become  so  thoroughly  demonstrated 
that  three  years  ago  American  capital,  encouraged 
by  legislation  providing  for  a  moderate  compensa- 
tion for  carrying  the  mails, — much  less  than  that 
which  England  pays  for  the  same  work, — decided  to 
make  another  start  in  the  revival  of  our  merchant 
marine.  We  admitted  two  vessels  to  American 
register, — the  New  York  and  Paris,  of  the  Inter- 
national Navigation  Company's  line, — upon  the  ex- 
press condition  that  two  more  vessels  equal  to  them 
in  size  and  capabilities  should  be  built  in  American 
yards.  Congress  guaranteed  a  payment  of  $4  a 
mile  to  these  ships  for  carrying  the  mails  to  foreign 
countries,  upon  the  condition  that  they  should  show 
themselves  capable  of  maintaining  a  sustained  speed 
of  twenty  knots  an  hour.  As  a  result  of  this  the 
St.  Louis  and  St.  Paul  were  built,  and  in  October, 
1895,  the  mail-carrying  contract  went  into  effect. 
The  St.  Louis  and  St.  Paul  have  shown,  in  the  short 
time  they  have  been  in  service,  their  splendid  worth ; 
and  the  hearty  reception  given  to  them  by  the  entire 
country  speaks  well  for  the  patriotism  of  the  Ameri- 
can people,  and  is  of  itself  a  most  hopeful  sign.  The 


122 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


St.  Louis,  on  her  official  trial  in  Great  Britain,  made 
an  average  of  twenty-two  knots  an  hour. 

This,  then,  is  the  condition  of  our  ship  building 
to-day.  In  ten  years  we  have  built,  in  round  num- 
bers, fifty  most  creditable  vessels  for  the  new  navy, 
and  two  fine  specimens  of  ocean-going  passenger- 
craft.  The  reports  of  the  Navigation  Commissioner 
show,  as  is  pointed  out  by  Mr.  Chamberlain  in  an- 
other chapter  of  this  work,  that,  of  the  ten  leading 
countries  of  the  globe,  Italy  and  the  United  States 
alone  show  a  decline  in  this  industry  since  1875. 
The  tonnage  of  Great  Britain  for  1895  is  placed  at 
27,885,806.  That  of  Germany,  now  the  second 
maritime  power,  is  4,065,282.  The  United  States 
comes  next,  with  a  tonnage  of  3,261,982,  a  decline 
in  twenty  years  of  nearly  1,000,000  tons.  In  twenty 
years  Germany  has  increased  her  tonnage  nearly 
3,000,000  tons.  Perhaps  an  incident  in  the  experi- 
ence of  a  young  woman  who  several  years  ago  made 
a  spectacular  trip  around  the  world  for  a  New  York 
newspaper  will  illustrate  the  extent  of  the  decline  of 
American  shipping  better  than  any  set  of  figures. 
The  last  instructions  given  to  this  young  woman 
were  to  make  note  of  the  number  of  times  and  the 
occasions  on  which  she  might  see  the  American  flag 
on  vessels  during  her  journey.  When  she  came 
back  she  reported  that  not  once  did  she  see  a  vessel 
flying  the  American  flag  from  the  time  she  left  New 
York  until  she  reached  San  Francisco.  Nothing 
more  need  be  said,  therefore,  to  show  the  complete 
prostration  of  this  industry,  notwithstanding  the  fact 
that  we  have  built  the  nucleus  of  a  new  navy  in  ten 
years,  and  are  now  in  a  position  to  build  ships  of  any 
kind  and  any  speed  within  the  limits  of  recognized 
possibilities. 

The  great  question,  therefore,  is,  How  shall  our 
merchant  marine  be  restored?  With  no  desire  to 
manifest  a  controversial  spirit  in  these  pages,  I  think 
every  one  who  has  studied  this  question  agrees  that 
national  legislation  of  some  kind  is  necessary.  On 
the  one  hand,  some  assert  that  the  repeal  of  the  navi- 
gation law  passed  December  31,  1792,  is  necessary. 
This  act  specifically  closed  American  registry  to 
foreign-built  ships,  except  those  taken  as  prizes  in 
war.  Its  repeal  would  give  us  free  ships.  We  could 
buy  vessels,  if  this  act  were  removed  from  the  statute- 
books,  at  English  prices.  On  the  other  hand,  those 
who  oppose  the  repeal  of  this  act  assert  that  what 
is  needed  is  government  aid  similar  to  that  which 
England  and  most  other  nations  give  to  their  ship- 
ping industries.  These  advocate  the  adoption  of 
one  or  all  of  three  kinds  of  government  assistance. 
The  first  is  special  compensation  to  special  lines  of 


steamships ;  the  next  is  a  general  bounty  on  tonnage 
to  all  ships;  the  third  is  a  liberal  compensation  to 
our  vessels,  according  to  size  and  grade,  for  carrying 
the  United  States  mails. 

Now,  eliminating  any  question  of  partisanship  in 
discussing  this  matter,  I  think  that  no  one  will  dis- 
pute that  probably  the  most  powerful  incentive  to  the 
growth  of  the  shipping  of  Great  Britain  has  been  this 
matter  of  government  aid.  It  will  also  be  admitted 
by  all  those  who  have  examined  the  question  histor- 
ically that  our  law  of  1792  was  intended  to  promote 
our  national  independence  rather  than  to  foster  an 
industry  by  a  protective  system.  In  those  days  the 
industry  needed  no  protection,  because  it  was  ad- 
mitted, and  had  been  proved  beyond  any  doubt,  that 
we  could  build  ships  cheaper  than  any  of  our  rivals. 
In  1789,  James  Madison,  then  a  member  of  the 
House  of  Representatives,  said  that  our  capacity 
for  increasing  the  tonnage  of  our  ships  "  gives  us 
a  favorable  presage  of  our  future  independence." 
Moreover,  there  is  conclusive  proof  that  this  navi- 
gation law  did  not  interfere  with  the  growth  of  our 
shipping.  It  has  been  in  effect  from  the  day  it  was 
passed  until  now.  When  we  were  at  the  height  of 
our  prosperity  in  shipping  the  law  was  in  actual 
operation,  just  as  it  is  to-day,  in  the  time  of  the 
prostration  of  this  industry. 

It  would  seem,  also,  that  we  all  ought  to  agree 
that  if  this  law  were  repealed  these  things  would 
happen  :  England,  under  our  natural  desire  to  buy 
as  cheaply  as  possible,  would  unload  her  poorest 
vessels  on  us,  and  her  shipyards  would  reap  a  bene- 
fit in  an  enormous  activity  in  building  new  vessels 
for  her  own  use.  A  new  market  would  be  opened 
for  the  relief  of  the  over-developed  English  ship- 
yards, now  sorely  languishing  because  other  nations 
are  beginning  to  build  their  own  vessels.  It  ought 
also  to  be  admitted  that  in  time  of  war  England 
would  be  able,  by  a  series  of  sales  easy  to  accom- 
plish, to  transfer  her  merchant  marine  to  the  Ameri- 
can flag,  and  thus  escape  the  terrible  penalty  that 
must  befall  her  in  case  she  should  enter  into  conflict 
with  any  other  nation.  Her  immense  shipping  is  a 
perpetual  bond  upon  her  not  to  engage  in  warfare. 
If  she  could  make  an  asylum  of  the  American  flag 
temporarily  she  could  resume  control  of  her  shipping 
when  hostilities  were  at  an  end. 

As  to  the  effect  on  the  shipping  industry  of  this 
country,  it  is  generally  conceded  that  the  repeal  of 
the  navigation  law  would  wreck  the  industry  as  at 
present  organized  here.  Those  who  favor  this  plan 
see  no  reason  why  the  government  should  foster  any 
single  industry.  Such  vessels  as  England  produces 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


she  could  build  cheaper  than  we  could  build  them. 
The  argument  that  our  yards  would  be  kept  busy 
with  repair-work  and  building  ships  for  the  coast- 
wise trade  would  fail,  because  repair-plants  are  of  an 
entirely  different  character  from  constructing  plants. 
If  we  could  import  ships  for  the  foreign  trade  we 
ought  to  have  the  same  privilege  for  our  coastwise 
trade.  A  discrimination  between  the  two  kinds  of 
trade  would  be  absolutely  unjust  to  our  mercantile 
interests.  Again,  if  we  could  get  our  ships  at  Eng- 
lish prices,  we  should  be  confronted  by  the  fact  that 
England,  to  retain  her  supremacy,  would  doubtless 
continue  to  insist  on  her  liberal  policy  of  govern- 
ment aid  to  her  ships,  and  to  hold  her  own  would 
probably  increase  that  aid  at  once.  It  is  difficult 
to  see  how,  under  these  circumstances,  we  could 
compete  with  her  in  the  commerce  of  the  world. 
By  unloading  her  least  desirable  vessels  on  us  she 
would  have  better  ships,  and  these,  with  favoring 
legislation,  would  place  us  at  once  under  a  disad- 
vantage. 

It  is  for  this  reason  that  the  advocates  of  govern- 
ment aid  have  declared  for  a  so-called  bounty  system 
in  this  country.  We  use  this  system  in  our  inland 
commerce  extensively.  We  pay  large  sums  every 
year  to  the  railroads  for  carrying  the  mails.  In  that 
case  we  call  it  a  compensation.  It  is  called  a 
"  bounty  "  when  we  give  such  aid  to  ships.  Why 
should  subsidies  of  land  be  given  to  the  great 
railroads  and  not  to  the  ship-building  interests  ? 
Enormous  grants  of  land  have  been  allotted  by  the 
government  to  the  great  railway  companies,  and 
these  very  roads,  fattened  on  government  patronage, 
are  now  giving  the  preference  of  business  at  their 
terminals  to  foreign  bottoms,  to  the  exclusion  of 
American  ships,  as  is  the  case  at  Pensacola,  New- 
port News,  New  Orleans,  and  on  the  Pacific  coast. 
All  the  advocates  of  a  general  tonnage  bounty,  if 
such  a  term  is  to  be  used,  declare  that  within  ten 
years  after  the  passage  of  such  a  law  we  should  be 
practically  independent  of  every  nation  in  the  matter 
of  ships.  Many  such  bills  have  been  introduced  in 
Congress,  but  there  seems  little  prospect  at  present 
that  any  such  law  will  be  passed.  Three  years  ago 
we  did  adopt  a  scale  of  compensation  for  American 
vessels  carrying  the  mails  to  foreign  countries.  The 
contract  has  just  gone  into  effect.  It  requires  from 
two  to  three  years  to  build  ships  such  as  the  Sf.  Louis 
and  St.  Paul.  The  post-office  authorities  at  first  re- 
ported that  the  new  law  seemed  to  have  little  effect. 
By  special  legislation  the  New  York  and  Paris  were 
admitted  to  American  register,  and  now,  for  the  first 
time  in  our  history,  we  are  to  have  an  actual  trial  of 


123 

the  effect  of  this  kind  of  government  encouragement 
of  our  shipping  industry. 

The  system  is  to  run  for  ten  years.  What  the  re- 
sult will  be  time  alone  will  tell,  but  this  much  can 
already  be  said :  it  has  added  to  our  naval  reserve 
fleet  four  magnificent  specimens  of  marine  archi- 
tecture, capable  of  immense  use  in  time  of  war  as 
commerce  destroyers.  The  money  paid  to  them  for 
carrying  the  mails  is  much  less  than  it  would  cost 
us  to  keep  actual  war-ships  of  that  grade  in  commis- 
sion. It  would  take  only  a  short  time  to  equip  them 
as  war-ships,  and  plans  for  that  purpose  have  already 
been  drawn.  If  a  general  tonnage  law  cannot  be 
passed,  we  are  assured  of  a  fair  trial  of  the  mail- 
carrying  compensation  system.  Already  in  the  build- 
ing of  the  St.  Louis  and  St.  Paul  it  has  had  some 
effect.  It  is  doubtful  if  this  system  of  itself  will  be 
sufficient  to  restore  the  ship-building  industry.  The 
fact  that  our  capitalists  are  willing  to  try  the  experi- 
ment is  most  encouraging. 

If,  however,  the  matter  of  government  aid,  as  now 
constituted,  should  fail,  the  future  is  not  entirely 
without  hope.  The  period  of  enormous  internal 
development  of  our  country  seems  to  be  ending. 
Our  railroads  are  practically  built ;  our  mines  are 
developed.  The  time  for  amassing  great  fortunes 
may  be  said  to  be  past.  Only  in  the  line  of  the 
development  of  real  estate  do  opportunities  for 
making  large  fortunes  seem  to  remain.  In  all 
grades  of  mercantile  interests  there  will  be  close  com- 
petition. Nevertheless  the  country  has  accumulated 
a  vast  amount  of  wealth,  and  it  is  beginning  to  seek 
investment.  The  fact  of  the  appearance  of  the 
St.  Louis  and  St.  Paul  is  proof  of  this.  As  time 
goes  on  it  must  be  that  our  wealth  will  increase. 
As  the  margin  of  profits  on  present  investments 
grows  less,  new  fields  will  be  opened.  If  it  can  be 
shown  that  a  reasonable  profit  will  follow  investments 
in  ships,  slowly  but  surely  the  industry  will  revive 
without  the  stimulus  of  government  assistance.  This 
must  needs  be  a  matter  of  extremely  slow  growth. 

By  the  creation  of  a  new  navy  our  shipyards  may 
be  kept  in  condition  to  build  this  new  merchant 
marine,  if  it  shall  come  within  a  reasonable  time. 
Naval  work  alone,  however,  is  not  sufficient  to  re- 
store our  shipyards  to  complete  efficiency.  At  best 
there  is  very  little  profit  in  government  work.  It  is 
surrounded  by  such  a  system  of  slow  and  intricate 
inspection  and  approval,  of  rigid  rules  and  regula- 
tions, that  rapid  work  is  impeded,  and  freedom  to 
make  changes  in  the  legitimate  line  of  develop- 
ment of  the  industry  is  prevented.  Then,  too,  gov- 
ernment work  is  intermittent  in  character.  Although 


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ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


it  is  inadvisable  to  fix  a  set  program  of  naval  develop- 
ment, owing  to  vast  and  constant  changes  that  are 
being  made  in  this  branch  of  warfare,  it  is  a  fact 
that  to  keep  the  ship-building  industry  as  at  present 
constituted  at  its  fullest  capability  there  should  be 
a  steady  and  comprehensive  advance  movement  in 
adding  to  our  fleets.  The  argument  that  it  is  not 
the  province  of  the  government  to  stimulate  any 
single  industry  to  the  exclusion  of  another  and  to  the 
private  benefit  of  individuals  loses  its  force  when 
we  consider  that  a  merchant  marine  is  necessary  to 
the  commercial  independence  of  any  country  with 
extended  sea-coasts. 

It  is  a  fact  that  cannot  be  disputed  that  so  timid 
is  capital  that  it  will  not  invest  in  ships  unless  the 
flag  they  carry  is  assured  of  complete  protection  by 
a  navy.  England's  naval  policy  is  to  be  interpreted 
alone  on  these  lines.  A  navy  capable  of  maintain- 
ing the  dignity  of  a  nation  is  not  a  constant  menace 
to  peace.  It  is  the  best  guaranty  to  the  develop- 
ment of  commerce  that  any  nation  can  give.  It 
means,  under  proper  conditions,  the  prophecy  of  a 
merchant  marine.  The  steady  development  of  a 
well-defined  policy  in  naval  construction,  therefore, 
means  the  maintenance  to  a  certain  extent  of  ship- 
yards which  will  be  ready  to  build  a  merchant 
marine  as  soon  as  there  are  war-ships  in  sufficient 
quantity  to  protect  it,  and  money  and  government 
aid  sufficient  to  start  it. 

Under  present  conditions,  therefore,  the  future  is 
one  of  promise.  It  may  be  several  decades  before 
our  flag  is  even  partially  restored  to  the  high  seas. 
The  revival  of  our  merchant  marine  must  surely 
come  in  time  if  we  continue  in  the  rate  of  prosperity 
that  has  marked  our  development  for  the  last  thirty 
years.  It  will  come  sooner  if  liberal  aid  is  given 


by  the  government.  So  complex  are  the  subsidiary 
industries  in  the  present  condition  of  building  ships 
that  the  revival  will  affect  not  only  capitalists  along 
the  coasts  and  elsewhere,  but  will  employ  a  vast 
army  of  men  in  the  interior  as  well  as  along  the 
seaboard.  The  probable  completion  of  the  Nica- 
ragua Canal  will  cause,  undoubtedly,  an  immense 
stimulus  to  American  commerce.  Whether  those 
who  oppose  the  system  of  government  aid  on  gen- 
eral principles,  owing  to  their  views  as  to  the  proper 
function  of  a  nation,  are  right  or  not,  is  it  not  worth 
considering  if  it  would  not  be  well  for  especial  rea- 
sons to  be  ready  to  carry  this  coming  commerce  of 
the  United  States  in  American  ships?  Once  started 
on  the  road  to  prosperity,  who  that  knows  the  char- 
acter of  the  American  people  can  doubt  the  result? 
A  fine  specimen  of  marine  architecture  is  always 
a  standing  lesson  in  patriotism.  It  is  required  to 
display  the  flag  of  its  country.  As  it  passes  from 
port  to  port  it  is  more  than  a  mere  floating  vehicle 
for  commerce.  It  is  a  bit  of  its  nation's  soil. 
Around  its  existence  and  its  journeyings  the  ro- 
mance of  travel  and  the  dignity  of  nationality  center. 
No  other  manufactured  thing  is  so  complex  or 
delicate.  It  tells  a  story  of  national  progress  such 
as  nothing  else  can  tell.  It  speaks  of  home  to  the 
citizen  in  foreign  lands.  It  means  prosperity  for 
those  at  home  and  abroad ;  for  every  vessel  added 
to  the  fleet  of  any  nation  means  more  commerce, 
more  trade.  No  patriotic  citizen  should  relax  his 
efforts  to  secure  a  revival  of  this  industry  in  this 
country  in  some  form  or  other.  We  have  the  mills, 
we  have  the  men,  we  are  just  beginning  to  have  the 
money,  and  we  have  the  materials  in  rare  abundance. 
The  situation  calls  for  the  wisest  statesmanship,  the 
loftiest  patriotism,  the  noblest  effort. 


CHAPTER   XIX 

THE   TELEGRAPH 


THE  first  real  manifestation  of  telegraphy  as 
an  applied  art  dates  from  just  one  hundred 
and  one  years  ago,  and  to  Claude  Chappe,  a 
Frenchman,  is  due  the  discovery  of  it  and  its  possi- 
bilities. It  was  a  visual  telegraph  or  semaphore 
that  Chappe  invented,  and  for  the  better  part  of 
a  half-century  afterward  it  was  the  only  quick  mode 
for  communicating  at  a  distance  that  Europe  knew. 
An  ingeniously  contrived  signal-code  and  perfected 
mechanical  appliances  made  this  semaphore-tele- 
graph not  only  most  useful,  but  very  rapid,  a  des- 
patch traveling  at  the  rate  of  from  fifteen  to  twenty 
miles  a  minute  on  the  main  lines.  It  was  introduced 
in  France  in  1794,  and,  after  the  populace  had  de- 
stroyed the  signal-towers  several  times,  it  was  finally 
completed  in  time  for  the  first  message  sent  over  it 
to  be  the  thrilling  news  of  a  French  victory.  "  Conde 
is  taken  from  the  Austrians,"  came  the  signaled 
words  from  the  frontier  within  three  or  four  hours 
after  the  event,  and  Paris  went  wild.  Chappe  was 
as  great  an  idol  as  he  had  before  been  an  object  of 
hatred,  and  his  telegraph  became  the  wonder  of  the 
day.  Europe  followed  France  in  1802  in  introduc- 
ing Chappe's  idea,  and  England  shortly  afterward, 
in  1823,  made  use  of  it  at  home  and  in  India.  It 
was,  in  fact,  the  common  telegraphic  system  of  the 
world  up  to  the  time  when  the  invention  of  the 
electric  telegraph  upset  all  previous  ideas  of  human 
limitations. 

The  germ  of  the  idea  which  came,  in  Chappe's 
hands,  to  full  development  was  first  seen  in  the  sig- 
nal used  by  the  Americans  during  the  Revolutionary 
War.  This  consisted  of  a  barrel  on  the  top  of  a 
high  pole  or  mast,  on  which  was,  furthermore,  a 
movable  yard  or  arm  to  which  a  basket  was  attached. 
To  each  of  the  different  positions  of  this  arm  a 
meaning  was  given,  and  signals  could  be  sent  many 
miles  by  these  means.  While  it  is  certain  that 
Chappe  never  saw  this  contrivance,  the  similarity  of 
its  elementary  design  with  that  of  his  telegraph  gives 


them  a  direct  connection.  The  semaphore-telegraph 
was  in  use,  with  an  elaborate  system  of  signals,  in 
this  country  for  many  years  prior  to  1850.  It  was 
the  means  for  communicating  news  of  incoming 
ships  from  the  Highlands  of  New  Jersey  to  New 
York,  where  the  signal-tower  was  located  in  the 
dome  of  the  old  Merchants'  Exchange,  now  the 
custom-house. 

Before  entering  upon  the  detailed  history  of  the 
modern  telegraph,  a  brief  diversion  will  be  necessary. 
No  fitting  idea  of  the  glorious  successes  it  has  at- 
tained could  be  conveyed  were  the  earlier  discover- 
ies and  experiments  in  electrical  phenomena  to  be 
omitted.  Electricity  is  to  the  telegraph  as  steam 
to  the  motive  engine  or  gravity  to  the  universe — the 
force  that  makes  it  possible.  The  discovery  that 
amber  (from  the  Greek  name  of  which  the  word 
"  electricity "  is  derived)  became  electrified  under 
friction  is  an  old  one,  but  the  reduction  of  this  dis- 
covery to  anything  like  scientific  analysis  or  classifi- 
cation only  dates  from  about  the  middle  of  the  last 
century.  In  the  list  of  those  whose  discoveries  have 
borne  the  most  important  relation  to  the  develop- 
ment of  this  wonderful  science  the  names  of  Ameri- 
cans are  at  the  head.  Europe  reverences  the  glory 
of  Galvani,  Volta,  Oersted,  Arago,  Ampere,  and 
Steinheil,  while  England  vaunts  her  Cooke,  Wheat- 
stone,  and  Bain ;  but  above  them  all  are  written 
the  names  of  Franklin,  Henry,  and  Morse. 

It  was  in  1747,  the  year  after  the  discoveries 
which  developed  the  Leyden  jar  and  the  principle 
of  the  restoration  of  electric  equilibrium,  that  Ben- 
jamin Franklin  first  interested  himself  in  the  phe- 
nomena of  electricity.  A  letter  from  Peter  Collinson, 
fellow  of  the  Royal  Society  of  London,  to  the 
Literary  Society  of  Philadelphia,  of  which  Franklin 
was  a  member,  interested  the  latter,  and  he  then 
began  by  his  reply  that  interesting  series  of  letters, 
continuing  for  many  years,  in  which  he  laid  down, 
and  later  proved,  so  many  propositions,  since  be- 


125 


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ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


come  axiomatic,  but  totally  at  variance  with  the 
accepted  European  theories  of  that  day.  In  1749 
he  declared  electricity  and  lightning  identical,  and 
in  June,  1752,  proved  it  by  the  celebrated  kite  sent 
up  during  a  thunder-storm.  Franklin  was  succeeded 
in  America  by  Professor  Joseph  Henry,  in  after 
years  connected  so  prominently  with  the  Smithsonian 
Institute.  At  the  time  when  this  distinguished  sa- 
vant was  commencing  his  researches,  and  just  be 
fore,  great  discoveries  were  being  made  in  Europe. 
Coulomb  in  1785  laid  the  foundation  of  electrostat- 
ics. Galvani,  of  Bologna,  in  1790  discovered  by 
accident  that  metallic  connection  between  the  crural 
nerve  and  the  legs  of  a  frog  caused  convulsive 
action.  He  ascribed  it  to  animal  electricity,  and 
all  the  physiologists  of  Europe  adopted  his  theory. 
The  electricians,  however,  doubted,  and  in  1800 
Professor  Volta,  of  Pavia,  demonstrated  beyond  a 
doubt  that  the  effect  produced  was  through  elec- 
tricity generated  chemically.  In  proving  this  he 
brought  out  the  voltaic  pile,  which  was  the  first  the 
scientific  world  knew  of  any  electricity  other  than 
static  or  frictional.  On  this  discovery  of  Volta, 
affording,  as  it  did,  a  current  electricity,  together 
with  the  subsequent  discovery  of  electro-magnetism 
by  Professor  Christian  Oersted,  of  Copenhagen,  in 
1819,  is  based  the  electric  telegraph  of  to-day.  The 
voltaic  pile,  to  which  improvements  were  early 
made  by  Cruikshank,  Daniell,  Smee,  Bunsen,  Grove, 
Chester,  and  by  many  others  since,  is  the  battery 
of  to-day ;  and  Oersted's  electro-magnetism,  in  the 
hands  of  Schweigger,  Arago,  Ampere,  Sturgeon,  and 
finally  Henry,  has  afforded  the  electro-magnets, 
giving  the  principle  on  which  were  based  the  old 
English  deflecting-needle  telegraphs  and  the  present 
Morse  instruments. 

These  discoveries  in  electrical  science,  the  latest 
of  which  was  in  1825,  left  the  field  free  for  the  pio- 
neer who  should  carry  forth  the  telegraph.  Many 
had  already  essayed  this  honor,  but  the  man  and  the 
time  were  not  yet  in  conjunction.  So  early  as  1749 
Franklin  had  sent  a  current  through  a  long  wire 
across  the  Schuylkill,  and  in  1753  Charles  Marshall, 
of  Paisley,  Scotland,  had  proposed  a  telegraph  with 
a  wire  for  each  letter. 

Among  the  many  who  have  originated  forms  of 
electric  telegraph  are  an  Englishman  named  Lo- 
mond, who  in  1787  is  said  to  have  operated  a  short 
telegraph  line  on  his  front  lawn ;  Reizen,  who  in 
1794  invented  the  illuminated-letter  telegraph  by 
the  application  of  the  broken  current;  Salva,  a 
Spaniard,  in  1798,  who  used  electrified  pith-balls; 
Samuel  Thomas  Sommering,  who  in  1809  first 


applied  the  current  from  the  voltaic  pile  to  tele- 
graphing; Ronald,  in  1816;  Gauss  and  Weber,  of 
Gottingen,  who  brought  out  the  magnetic-movement 
mirror  and  glass  in  1833;  and  Steinheil,  who  in 
1838  discovered  the  "  earth-circuit,"  which  did  away 
with  the  previously  supposed  indispensable  return- 
wire  to  bring  the  current  back  to  the  battery. 
Steinheil  also  invented  a  system  of  telegraphy,  and 
ran  his  wires  on  poles  with  insulated  attachments. 
Across  the  Channel,  William  Fothergill  Cooke,  hav- 
ing invented  a  magnetic-needle  telegraph  in  1836, 
associated  himself  with  Professor  Wheatstone  the 
succeeding  year,  and  introduced  his  invention  to 
general  use.  The  needle-telegraph  in  various  and 
improved  forms,  and  Bain's  electro-chemical  tele- 
graph, continued  to  be  the  ones  used  in  England  up 
to  a  late  date,  and  were  supplanted  by  the  Morse 
system  only  when  the  latter  became  practically 
universal. 

Of  the  early  telegraphers  there  is  one  whose 
name,  too  nearly  forgotten,  had  almost  been  written 
before  that  of  Morse  on  the  roll  of  fame.  This 
man  was  Harrison  Gray  Dyar,  and  the  evidence  is 
strong  that  so  early  as  1827  he  had  erected  and 
operated,  upon  a  certain  Long  Island  race-track,  a 
telegraph  line  strung  upon  poles  with  glass  insula- 
tors. This  telegraph  communicated  signals  by  the 
discoloration  produced  by  the  electric  current  upon 
a  piece  of  moving  litmus-paper,  which  had  been 
previously  moistened.  Dyar  used  only  frictional 
electricity,  and  was  therefore  unable  to  attain 
results  so  eminently  successful  as  those  of  inven- 
tors after  1835,  who  could  apply  the  wonderfully 
improved  device  of  the  Daniell  cell  in  supplying 
their  current.  An  attempt  made  by  Dyar  to  intro- 
duce his  telegraph  to  general  use  encountered  intense 
prejudice,  and,  becoming  frightened  at  some  of  the 
manifestations  of  this  feeling,  he  left  the  country. 

Meantime,  while  all  these  claims  were  advancing, 
the  one  preeminently  great  invention  was  rapidly 
maturing  on  this  side  of  the  Atlantic  Ocean.  In 
1832  the  transatlantic  packet  Sully,  bound  for  New 
York  from  Havre,  had  on  board  among  her  passen- 
gers a  distinguished  historical  painter  named  Samuel 
Finley  Breese  Morse.  In  the  long  evening  talks  in 
the  passengers'  cabin  the  subject  of  electricity  and 
the  electric  current  was  brought  up  one  night.  A 
well-known  professor  of  sciences,  Dr.  Jackson,  made 
the  statement  that  an  electric  current  would  manifest 
itself  at  the  distant  end  of  a  conducting  wire  in- 
stantaneously. The  remark,  made  in  the  course 
of  conversation,  impressed  Professor  Morse  deeply, 
and  going  to  his  state-room,  he  commenced  work  on 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


127 


the  application  of  this  space-annihilating  current  to 
the  transmission  of  intelligence.  Before  the  Sully 
readied  her  dock  the  thing  was  accomplished — in 
the  inventor's  mind,  at  least ;  and  certain  drawings 
and  explanations  made  by  him  at  that  time,  and 
sworn  to  by  the  captain,  were  later  produced  before 
the  Supreme  Court  during  the  suits  by  which  the 
validity,  scope,  and  priority  of  the  Morse  patents 
were  fully  confirmed. 

On  landing,  Professor  Morse  constructed  his  first 
machine,  making  the  type  himself  for  his  famous 
alphabet,  which  stands  to-day  as  the  most  wonder- 
ful piece  of  cryptography  ever  devised.  Lack  of 
funds  was  a  great  drawback  to  the  inventor,  both 
at  this  time  and  for  many  years  to  come ;  but  in 
November,  1835,  he  successfully  exhibited  his  tele- 
graph in  a  large  room  of  the  New  York  City  Uni- 
versity, transmitting  a  message  through  a  long  wire. 
Among  those  who  witnessed  this  first  exhibition  of 
the  electric  telegraph  were  Leonard  D.  Gale,  D. 
Huntington,  O.  Loomis,  and  Robert  Rankin.  The 
following  year  the  invention  was  on  public  exhibi- 
tion in  New  York,  and  in  February,  1837,  when 
Congress  passed  a  resolution  requesting  the  Secre- 
tary of  the  Treasury  to  report  upon  some  method 
of  electric  telegraphing,  the  claims  of  Morse  were 
strongly  presented,  and  in  April,  1838,  the  Commit- 
tee of  Commerce  of  Congress  made  a  unanimous 
report  of  the  most  favorable  tenor  upon  the  Morse 
invention.  The  chairman  of  this  committee,  Hon. 
Francis  O.  J.  Smith,  characterized  Morse's  telegraph 
as  the  "  most  wondrous  birth  of  this  wonder-teeming 
age."  So  impressed  was  Mr.  Smith  with  the  great 
possibilities  of  the  telegraph  that  he  resigned  his 
seat  as  a  member  of  Congress  and  purchased  a 
quarter  interest  in  the  Morse  rights.  The  other 
members  of  Mr.  Smith's  committee,  whose  names 
appear  signed  to  the  unanimous  and  earliest  indorse- 
ment of  the  value  of  Professor  Morse's  discovery, 
were  S.  C.  Phillips,  Samuel  Cushman,  John  I.  de 
Graff,  Edward  Curtis,  James  M.  Mason,  John  T.  H. 
Worthington,  William  H.  Hunter,  and  George  W. 
Toland. 

The  recommendation  of  this  committee  to  the 
contrary  notwithstanding,  Congress  refused  to  ap- 
propriate the  $30,000  asked  by  Morse  to  construct 
an  experimental  line.  Mr.  Smith  and  Professor 
Morse  accordingly  sailed  for  Europe  to  attempt  its 
introduction  there.  Their  mission  proved  a  failure, 
patents  being  refused  them  in  England  on  the 
ground  that  a  partial  description  of  the  Morse 
system  had  been  published.  In  France  a  patent 
was  issued,  only  to  be  withdrawn.  Returning  to 


this  country,  Professor  Morse  received  his  letters 
patent  in  June,  1840,  based  on  the  specifications  of 
his  application  in  April,  1838.  In  1842  he  again 
presented  his  invention  before  Congress,  asking  an 
appropriation  of  $30,000.  The  House  promptly 
passed  it  (see  report  on  the  debate,  p.  46 1  of  Prime), 
but  the  session  dragged  along  and  the  traditional 
delay  of  the  Senate  kept  the  bill  from  reaching  a 
hearing.  On  the  last  night  of  the  last  day  of  the 
session,  March  3,  1843,  Professor  Morse  waited  in 
the  Senate  corridors  until  late  in  the  evening,  when, 
believing  his  cause  hopeless,  he  returned  to  his  hotel 
almost  broken-hearted.  Had  he  but  known  it,  one 
of  the  last  acts  of  the  Senate  during  the  very  last 
hour  was  to  take  up  the  Morse  appropriation. 
Singularly  enough,  no  dignified  questioner  arose  to 
ask  for  information  concerning  the  bill,  which  would 
have  required  time  and  so  proved  fatal  to  it,  but  it 
was  straightway  passed,  and  early  the  next  morning 
the  news  was  brought  to  Professor  Morse  by  Miss 
Annie  Ellsworth,  to  whom  the  overjoyed  inventor 
then  and  there  promised  the  honor,  which  she 
afterward  enjoyed,  of  sending  the  first  message  when 
the  line  should  be  completed. 

The  condition  under  which  Professor  Morse 
received  the  $30,000  was  that  he  should  use  it  in 
the  construction  of  a  line  of  electric  telegraph  from 
Baltimore  to  Washington.  He  immediately  com- 
menced work  on  this  line ;  but  his  early  efforts  were 
wholly  useless,  owing  to  a  serious  mistake  in  his 
plans.  He  projected  a  subterranean  line,  and  for 
this  purpose  two  copper  wires  covered  with  cotton 
and  gum  lac  were  drawn  through  a  lead  tube.  A 
deep  furrow  was  then  made  with  a  heavy  plow,  and 
the  pipe  laid  as  far  as  the  relay-house,  nine  miles 
from  Baltimore.  (See  Cornell's  account  in  the 
"  Biography  of  E.  Cornell.")  It  was  then  discov- 
ered that  an  earth-circuit  was  formed  and  the  wires 
refused  to  work.  The  greater  part  of  the  appropri- 
ation having  been  thus  unsuccessfully  expended, 
Professor  Morse  was  in  great  trouble ;  but  finally, 
by  withdrawing  all  the  wire  from  the  miles  of  lead 
pipe  and  stringing  it  on  poles  above-ground,  the 
line  was  completed  in  May,  1844,  and  on  the  zyth 
of  that  month  the  first  despatch,  "  What  hath  God 
wrought ! "  flashed  over  the  wires  from  Washington 
to  Baltimore,  being  sent  by  Miss  Annie  Ellsworth, 
as  long  before  agreed.  Professor  Morse's  manipu- 
lating assistants  at  this  trial  were  Mr.  Alfred  Vail, 
who  in  1837  had  invented  and  patented  a  printing- 
telegraph,  and  Mr.  L.  F.  Zantzinger.  The  electro- 
magnets used  on  this  line  weighed  185  pounds,  and 
for  some  time  after  this  Professor  Morse  believed 


128 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


that  the  wire  used  in  winding  them  had  to  be  of  the 
same  size  as  that  on  the  line  itself.  The  present 
fine-wired,  compact,  and  portable  electro-magnets, 
weighing  less  than  a  pound,  and  allowing  a  man  to 
carry  a  telegraph  office  in  his  pocket,  so  to  speak, 
were  not  dreamed  of  at  that  early  day.  This  line 
was  also  opened  with  the  primitive  system  of  com- 
bined circuits,  as  first  proposed  by  Professor  Morse 
in  obviating  the  difficulties  arising  from  lost  strength 
in  the  current  on  long  distances.  He  speedily  saw 
a  better  way  to  accomplish  this  result,  however,  and 
in  that  same  year  began  the  experiments  which  in 
1 846  were  crowned  with  success,  and  developed  the 
short  circuits  and  relays  which  made  possible  the 
great  main  lines  and  uninterrupted  communication 
of  to-day.  In  1844  he  also  invented  the  "key" 
which  is  still  in  use.  Without  attempting  the  purely 
scientific  and  technical  aspects  of  telegraphy,  we 
will  study  at  more  length  the  practical  and  utilitarian 
application  of  it  to  the  world  of  American  business 
and  every-day  affairs. 

The  experimental  line  opened  from  Washington 
to  Baltimore  with  the  $30,000  appropriated  by 
Congress  having  proved  practical,  it  was  declared 
ready  for  public  business  on  April  i,  1845.  Alfred 
Vail  was  the  Washington  operator,  and  Henry  J. 
Rogers  occupied  a  similar  position  at  Baltimore. 
The  tariff  was  one  cent  for  four  characters,  and  the 
first  four  days  saw  just  one  message  transmitted. 
Thus  did  the  American  people  welcome  the  facilities 
of  the  electric  telegraph.  About  this  time  Profes- 
sor Morse  offered  his  interest  in  the  invention  to 
the  government  for  the  ridiculously  low  price  of 
$100,000.  A  brilliant  Postmaster-General,  how- 
ever, who  saw  no  value  in  the  invention,  saved 
Morse  the  loss  he  was  so  willing  to  incur ;  so  other 
means  had  to  be  resorted  to  in  bringing  it  before 
the  public.  The  proprietors  of  the  patent  at  this 
time  were  Morse,  Vail,  L.  D.  Gale,  and  F.  O.  J. 
Smith.  The  latter  struck  out  alone,  taking  the  New 
England  States  for  his  field,  while  the  other  three, 
having  selected  Amos  Kendall,  formerly  Postmaster- 
General  under  President  Jackson,  as  their  agent,  took 
the  remainder  of  the  country.  Kendall  devoted 
himself  particularly  to  the  South  and  Southwest, 
although  it  was  early  decided  to  have  the  first  line 
run  from  Washington  to  New  York.  In  carrying 
out  this  plan  it  was  decided  further  that  the  first 
link  should  be  constructed  from  New  York  to  Phil- 
adelphia. The  excitation  of  the  public  interest  in 
the  undertaking,  and  the  consequent  raising  of  cap- 
ital, were  intrusted  to  Ezra  Cornell  and  his  brother- 
in-law,  O.  S.  Wood.  These  two  opened  a  small 


office  on  Broadway,  where  they  set  up  their  instru- 
ments ;  and  having  obtained  with  great  difficulty 
permission  to  run  a  short  wire  over  the  neighboring 
roofs,  they  began  exhibiting  the  telegraph.  Interest 
was  roused  but  slowly,  however,  and  capital  was 
apathetic. 

The  sum  needed  for  the  construction  of  the  line 
from  New  York  to  Philadelphia  was  $15,000,  and 
it  was  only  after  the  greatest  difficulty,  and  the 
granting  of  two  shares  for  every  one  paid  for,  that 
it  was  finally  raised.  There  were  about  twenty-five 
subscribers,  and  to  them  was  issued  $30,000  in 
stock,  while  another  $30,000  went  to  the  patentees, 
making  the  total  capital  stock  $60,000.  The  com- 
pany was  organized  under  the  name  of  the  Magnetic 
Telegraph  Company,  and  its  line  was  completed 
from  Philadelphia  to  Fort  Lee  on  January  20,  1846. 
The  first  New  York  office  was  at  16  Wall  Street, 
and  later  it  was  moved  to  Post's  Building,  behind 
the  Merchants'  Exchange.  The  first  clerk  was 
Charles  S.  Bulkley,  and  messages  had  to  be  sent 
across  the  river  by  messengers,  either  for  delivery  or 
transmission.  The  attempt  to  cross  the  North  River 
by  cable  failed  in  this  year.  Later  a  detour  of  105 
miles,  by  which  the  line  went  up  the  Hudson  and 
crossed  on  high  masts  at  Anthony's  Nose,  proved  a 
failure.  Various  attempts  to  lay  a  cable  were  made, 
but  success  was  not  achieved  until  February  12, 
1856,  when  S.  C.  Bishop,  the  New  York  manufac- 
turer, provided  an  armored  cable  insulated  with 
gutta-percha.  The  Magnetic  Telegraph  Company 
formally  organized  on  January  14,  1846,  by  the 
election  of  Amos  Kendall,  president ;  T.  M.  Clark, 
secretary ;  A.  Sidney  Doane,  treasurer ;  and  B.  B. 
French,  John  J.  Haley,  John  W.  Norton,  John  O. 
Sterns,  William  M.  Swain,  and  J.  R.  Trimble, 
directors.  The  line  was  extended  to  Baltimore, 
June  5,  1846,  on  an  issue  of  $10,000  more  stock, 
and  later  to  Washington.  Its  cash  receipts  during 
the  year  1846  amounted  to  $4,228.77.  Six  years 
later,  even  with  the  handicap  of  competing  lines,  its 
annual  receipts  amounted  to  $103,641.42,  which 
indicates  the  increasing  public  favor  shown  to  the 
telegraph. 

In  the  decade  that  followed  1845  and  the  first 
telegraph,  companies  started  and  wires  ran  over  the 
country  at  an  almost  magical  rate.  Henry  O'Reilly, 
one  of  the  most  energetic  promoters  and  builders 
this  continent  ever  produced,  started  westward, 
leaving  his  lines  of  wires  behind  to  mark  his  course. 
From  Philadelphia  to  Pittsburg  he  ran  the  Atlan- 
tic and  Ohio  Telegraph  Company,  capitalized  at 
$300,000,  and  completed  December  29,  1846. 


THOMAS  T.  ECK.ERT. 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


129 


From  Pittsburg  to  Louisville  he  built,  in  1847,  the 
1'ittsburg,  Cincinnati,  and  Louisville  Telegraph 
Company's  line.  It  was  over  this  wire  that,  in  1847, 
using  a  House  machine,  O'Reilly  sent  the  first 
despatch  ever  transmitted  by  the  printing  system. 
Still  further  did  O'Reilly  go,  notwithstanding  the 
fact  that  a  bitter  legal  battle  was  raging  between 
himself  and  F.  O.  J.  Smith  for  the  Morse  patentees, 
who  claimed  O'Reilly  had  infringed  on  their  rights. 
From  Louisville  he  boldly  struck  out  for  New 
Orleans  via  Nashville,  and  with  a  branch  to  Mem- 
phis. This  line  was  incorporated  as  the  People's 
Line,  and  was  completed  in  1849  ;  but  it  was  unsuc- 
cessful from  the  start,  and  nearly  ruined  O'Reilly. 
It  was  later  consolidated  with  the  Ohio  and  New 
Orleans  Telegraph  Company;  the  two  organized, 
January  6,  1860,  as  the  Southwestern  Telegraph 
Company,  which  was  absorbed  by  the  American 
prior  to  that  company  itself  being  taken  in  by  the 
Western  Union.  Among  the  other  early  telegraph 
lines  were  the  following: 

EARLY  AMERICAN  TELEGRAPH  COMPANIES. 


NAME. 


DATE  OF 
ORGANIZATION. 


New  York  and  Boston  Magnetic  Telegraph  Co.       1845 

New  York,  Albany,  and  Buffalo  Electro-MagneticCo 

Lake  Erie  Telegraph  Co 1847 

New  York  State  Printing  Co.  (House  line) 

Ohio  and  Mississippi  Telegraph  Co 1848 

St.  Louis  and  New  Orleans  Telegraph  Co 1848 

New  York  State  Telegraph  Co.  (Bain  line) 

New  York  and  New  England  Telegraph  Co 1849 

American  Telegraph  Co 

Illinois  and  Mississippi  Telegraph  Co 1849 

Erie  and  Michigan  Telegraph  Co 1848 

New  York  and  Erie  Telegraph  Co  1849 

Cleveland  and  Cincinnati  Co 

Maine  State  Telegraph  Co 1847 

Vermont  and  Boston  Telegraph  Co 1848 

New  York  and  Washington  Printing  Telegraph  Co..  1848 

North  American  Telegraph  Co.  (Bain  line) 1848 

Washington  and  New  Orleans  Telegraph  Co 1846 

Western  Telegraph  Co 1848 

Ohio,  Indiana,  and  Illinois  Telegraph  Co 1849 

St.  Louis  and  Missouri  River  Telegraph  Co 1850 

Northwestern  Telegraph  Co 1856 

Western  Union  Telegraph  Co 1851 

These  companies,  with  the  branch  lines  repre- 
sented by  them,  comprised  the  bulk  of  the  capital 
invested  in  the  telegraph  of  the  United  States  prior 
to  1855.  The  Magnetic  Telegraph  Company,  as 
the  oldest  and  for  many  years  one  of  the  most  suc- 
cessful, was  the  first  to  perceive  how  essential  uni- 
formity was  to  an  economical  and  at  the  same  time 
improved  service.  Under  President  William  M. 
Swain  this  company  made  many  advances  and  also 
many  concessions  to  other  companies  to  bring  about 
this  condition  of  affairs.  To  several  of  the  Western 
and  Southern  lines  it  leased  wires,  thus  allowing 
them  to  compete  for  through  business.  To  give 


itself  equal  opportunities  it  leased  the  Washington 
and  New  Orleans  lines  in  1856,  the  Western  Tele- 
graph Company's  lines,  including  the  Marietta  and 
Cincinnati  branch,  in  1858,  and,  under  the  Supreme 
Court  decision  upholding  the  Morse  patent  rights  as 
against  the  Bain  electro-chemical  telegraph,  it  ab- 
sorbed the  North  American  Company. 

The  second  great  seaboard  line  and  power  for  con- 
solidation was  the  American  Telegraph  Company, 
with  the  history  of  which  the  greatest  telegraphic 
undertaking  ever  known— the  transatlantic  cable- 
is  connected.  In  1850  some  thoughtful  writer 
pointed  out  that  St.  Johns,  Newfoundland,  being 
the  port  for  the  speediest  arrival  of  European  steam- 
ships, ought  to  be  the  center  for  the  telegraphs  of 
America,  in  order  that  the  earliest  foreign  news 
should  be  obtained.  Acting  on  this  hint,  Mr.  F.  N. 
Gisborne  in  1851  incorporated  the  Newfoundland 
Electric  Telegraph  Company.  A  short  cable  was 
brought  from  England,  but  the  attempt  to  lay  and 
operate  it  was  unsuccessful.  In  1854,  Mr.  Gisborne, 
having  sunk  all  his  property  in  the  venture,  came  to 
New  York  seeking  capital.  He  was  introduced  to 
Cyrus  Field  and  laid  the  proposition  before  him. 
Field  not  only  grasped  the  idea,  but  he  carried  it 
further— to  its  very  end,  in  fact ;  and  then  and  there 
he  determined  that  the  transatlantic  cable  should  be 
laid.  He  interested  in  the  project  his  friends  Peter 
Cooper,  Marshall  O.  Roberts,  Chandler  White,  and 
Moses  Taylor,  and  on  May  6,  1856,  the  New  York, 
Newfoundland,  and  London  Electric  Telegraph 
Company  was  incorporated,  with  a  capital  of 
$1,500,000.  Both  this  government  and  that  of 
England  made  valuable  concessions  and  grants  to 
the  company. 

In  1856  the  cable  to  Newfoundland  was  success- 
fully laid,  and  October  3ist  of  that  same  year  the 
first  transatlantic  cable  was  ordered  from  Messrs. 
Newall  &  Company,  and  Glass,  Elliott  &  Company, 
of  London.  This  cable  was  composed  of  seven 
small  twisted  copper  wires,  surrounded  by  gutta- 
percha  covered  with  tarred  hemp,  and  inclosed  in 
an  iron  armor  of  eighteen  cords  of  small  wire. 
During  this  year  the  U.  S.  S.  Arctic  and  H.  M.  S. 
Cyclops  took  soundings  along  the  proposed  route  for 
the  cable.  The  United  States  and  England  each 
placed  two  vessels  at  the  disposal  of  the  company 
for  the  purpose  of  laying  the  cable.  The  United 
States  ships  were  the  Niagara,  carrying  one  half  the 
length  of  cable,  and  the  Susquehanna,  which  acted 
as  a  tender.  The  English  ships  were  the  Agamemnon, 
having  the  other  half  of  the  cable,  and  her  consort, 
the  Leopard,  acting  as  a  tender.  The  shore  end  of 


130 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


the  great  cable  was  landed  from  the  Niagara  at 
Ballycarberry  Strand,  in  Valentia  Bay,  Ireland, 
August  5,  1857,  and  two  days  later  the  fleet  started 
slowly  away  for  the  distant  shores  of  Newfoundland. 
The  first  three  days  all  went  well;  but  on  the  nth, 
late  at  night,  there  was  a  sudden  jar  and  shock,  and 
the  cable  was  found  to  be  broken.  Three  hundred 
and  eighty  miles  of  it  had  been  laid.  The  fleet 
returned  to  England,  and  the  remainder  of  the  cable 
was  stored  at  Keyham  docks  for  the  winter.  More 
cable  was  provided,  and  on  the  loth  of  June  the 
succeeding  summer  the  same  little  fleet  left  Plym- 
outh, this  time  for  mid-ocean,  it  having  been  deter- 
mined to  start  both  ships,  paying  out  simultane- 
ously. This  plan  was  tried,  and  twice  the  cable 
parted  before  more  than  a  short  distance  had  been 
traversed.  The  third  time  142  miles  were  paid  out 
before  a  break  finally  occurred.  This  time  the  ves- 
sels failed  to  meet  each  other,  and  so  returned  to 
Plymouth.  Having  thus  got  together  again,  a  last 
attempt  was  determined  upon,  and  on  July  2gth  it 
was  made  and  was  successful.  Almost  simultane- 
ously the  two  vessels  reached  the  shore  and  landed 
the  cable,  on  the  afternoon  of  August  5th,  the 
Niagara  at  Trinity  Bay,  Newfoundland,  and  the 
Agamemnon  at  Valentia  Bay,  on  the  Irish  coast. 
Two  thousand  and  thirty-six  miles  of  cable  had  been 
laid,  and  on  August  i6th  the  first  message  was 
flashed  under  the  ocean,  from  the  Queen  to  the 
President  of  the  United  States.  From  the  first  this 
cable  suffered  from  defective  insulation,  and  amid 
world- wide  grief  it  finally  gave  out,  September  ist, 
after  having  grown  steadily  weaker  from  the  moment 
it  was  first  tested. 

The  connection  of  this  the  first  transatlantic  cable 
with  the  inception  of  the  American  Telegraph  Com- 
pany may  not  at  first  be  seen ;  but  it  is  direct, 
nevertheless,  and  to  one  who  knew  the  late  Cyrus 
Field  and  his  character,  it  should  be  clear.  Mr. 
Field  from  the  first  believed  fully  in  his  cable  pro- 
ject, and,  so  believing,  he  was  far-sighted  enough  to 
recognize  the  importance  of  a  system  of  land  tele- 
graphs connecting  the  cable  with  the  great  centers. 
For  this  reason,  when  David  E.  Hughes,  who  had 
just  invented  an  excellent  printing- telegraph,  was 
introduced  to  Mr.  Field's  notice,  that  gentleman 
was  easily  induced  to  purchase  the  idea,  and  despite 
the  fact  that  the  transatlantic  cable  was  still  high 
and  dry  ashore,  he  secured  the  incorporation  of  the 
Boston  and  New  York  Printing-Telegraph  Company. 
Besides  this  company  others  were  organized  at  this 
time,  notably  the  East  and  West  and  the  Troy  and 
Boston.  The  Commercial  Printing-Telegraph  Com- 


pany gradually  replaced  these,  and  when  the  Amer- 
ican Telegraph  was  incorporated,  May  30,  1858, 
with  $200,000  capital,  it  had  no  difficulty  in  leasing 
this  latter,  together  with  other  Eastern  lines,  such 
as  the  Maine  State  Telegraph  Company.  The  ex- 
tension of  the  American  Telegraph  Company  from 
this  time  was  rapid,  and  in  1865,  when  the  Great 
Eastern  made  the  third,  and  unfortunately  fruitless, 
attempt  to  lay  a  cable,  this  company  controlled 
nearly  every  line  on  the  seaboard  east  of  the  Hud- 
son. On  July  i,  1866,  its  $4,000,000  capitalization 
being  replaced  by  an  issue  of  $12,000,000  of  West- 
ern Union  stock,  the  American  was  quietly  absorbed 
into  that  company. 

Scarcely  a  month  and  a  half  later,  on  August 
1 6th,  the  Anglo-American  Telegraph  Company,  the 
successor  of  the  various  other  cable  companies,  suc- 
ceeded in  laying  a  cable  from  the  Great  Eastern 
which  has  worked  ever  since.  The  failure  of  the 
attempt  made  by  the  same  ship  the  previous  year 
was  also  mitigated  shortly  after  this  by  the  suppos- 
edly lost  cable  being  found,  grappled,  brought  up, 
spliced,  and  successfully  laid. 

These  momentous  events  in  the  story  of  trans- 
oceanic telegraphy  were  being  duplicated  on  land, 
however.  Five  years  before  the  cable  of  1866  was 
even  wet  by  salt  water  a  transcontinental  telegraph 
line  was  flashing  the  stirring  news  of  that  warlike 
time  from  Washington  to  San  Francisco.  Hiram 
Sibley  is  the  man  to  whom  much  of  the  credit  for 
the  accomplishment  of  this  great  feat  is  due.  So 
long  before  as  1857  he  had  become  possessed  by 
the  idea  of  the  feasibility  of  this  undertaking,  and 
had  proposed  it  to  the  directors  of  the  Western 
Union  Company.  They  were  conservative,  and  a 
transcontinental  telegraph  was  no  light  thing  in  those 
days.  Nothing  discouraged,  Mr.  Sibley  laid  his  idea 
before  Congress,  and  obtained  from  that  body  in 
1860  not  only  indorsement,  but  liberal  concessions 
as  well.  Armed  with  these,  Mr.  Sibley  secured  the 
cooperation  of  the  Western  Union,  and  the  Pacific 
Telegraph  Company  was  organized.  The  California 
State  Telegraph  Company,  learning  of  the  plan, 
agreed  to  take  a  share  in  it,  and  a  company  was 
organized  there  to  build  the  line  as  far  as  Salt  Lake 
City,  which  was  to  be  the  Western  end  of  the  East- 
ern constructors.  Everything  seemed  propitious,  and 
work  was  begun. 

The  public  fully  expected  that  two  years  was  the 
minimum  time  in  which  the  line  could  be  completed, 
and  many  well-informed  people  believed  it  would 
take  longer.  The  surprise  of  the  country  can  be 
imagined,  therefore,  when  just  four  months  and 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


181 


eleven  days  from  the  time  work  was  commenced  the 
lines  met  and  were  joined  at  Salt  Lake  City,  and 
the  first  through  message  sent.  This  was  November 
15, 1 86 1.  Since  then  the  telegraph  across,  around, 
lengthwise,  or  breadthwise  of  the  land  has  stretched 
its  threads  of  steel.  The  blank  refusal  with  which 
the  New  Jersey  Transportation  Company  met  the 
request  of  grim  old  Amos  Kendall  to  run  the  first 
wires  of  the  Magnetic  Telegraph  Company  along 
their  roadway  was  modified  a  year  or  two  later, 
when  the  Baltimore  and  Ohio  Railroad  granted  the 
first  of  such  permissions ;  and  to-day  the  railroad 
and  the  telegraph  are  seen  to  be  inseparable.  The 
insignificant  sum — less  than  $5,000 — which  repre- 
sented the  first  year's  receipts  of  the  old  Magnetic 
Company  has  grown  to  dimensions  where  even  mil- 
lions have  to  be  reckoned  in  hundreds. 

Prior  to  1866,  the  year  that  saw  the  transconti- 
nental line  opened,  the  many  companies  and  small 
lines  divided  the  business  of  the  country  into  so 
many  channels  that  the  totals  are  not  obtainable. 
The  advance  of  system  and  uniformity  through 
consolidation  brought  comparative  order  out  of  this 
confusion,  and  in  1866  figures  were  made  up  giving 
the  total  wire  mileage  of  the  American  telegraphs  as 
75,686,  covering  an  actual  line  distance  of  37,380 


mated  for  the  country  at  large.  There  were  92,909 
people  employed  in  the  telegraph  business  by  all  the 
companies. 

In  the  year  ending  June  30,  1895,  the  figures  for 
the  Western  Union  Company  had  reached  dimen- 
sions scarcely  conceivable  as  the  result  of  a  single 
half-century's  improvement.  From  a  total  wire 
mileage  in  1883  of  462,283,  it  had  increased  nearly 
100  per  cent.,  the  total  in  1895  being  802,651  miles. 
These  wires  represented  a  line  length  of  poles  and 
cables  of  189,714  miles,  joining  in  one  complete  and 
organized  system  of  communication  21,360  offices. 
The  number  of  messages  transmitted  during  the  year 
was  58,307,315,  or  forty  per  cent,  more  than  in 
1883.  The  expenses  of  the  company  in  transacting 
this  business  were  $16,076,629,  leaving  a  profit  of 
$6,141,389.  This  return  for  one  year's  business  is  a 
wonderful  contrast  to  that  modest  little  sheet  which 
set  forth  the  first  annual  balance  of  the  old  Magnetic 
Telegraph  Company.  The  gradual  advance  by 
which  this  tremendous  volume  of  business  has  been 
rendered  possible  is  best  shown  in  the  following 
table,  giving  the  mileage  of  lines  operated,  number 
of  offices,  number  of  messages  sent,  receipts,  ex- 
penses, profits,  and  average  tolls  and  cost  per  mes- 
sage, for  selected  years  since  1866. 


WESTERN  UNION  TELEGRAPH  COMPANY,  1866  TO  1895. 


MILES  OF 

AVERAGE 

AVERAGE 

YEAR. 

POLES  AND 

OFFICES. 

MESSAGES. 

RECEIPTS. 

EXPENSES. 

PROFITS. 

TOLLS  PER 

COST  TO  Co. 

CABLES. 

MESSAGE. 

OF  MESSAGE. 

1866 

«88o 

75,686 

2.2SO 

1870.... 

54,109 

112,191 

3,972 

9,157,746 

$7,138,737.96 

$4,910,772.42 

$2,227,965.54 

75-5 

5'-2 

1875.... 
1880.  .  .  . 

85^45 

179,496 
233-534 

6,565 
9,077 

17,153,710 
29,215,509 

9,564,574.60 
12,782,894.53 

6,335414.77 
6,948,956-74 

3,229,157.83 
5,833,937-79 

54 
38-5 

35-2 
25.4 

1885.... 
1889... 
1895   ... 

147,500 

178,754 
189,714 

462,283 
647,697 
802,651 

14,184 
18470 
21,360 

42,096,583 
54,108,326 

17,706,833.71 
20,783,194.07 
22,218,019.18 

12,005,909.58 
14,565,152.61 
16,076,629.97 

5,700,924.13 
6,218,041.46 
6,141,389.21 

32.1 
31.2 

3°-7 

24.9 
22.4 
23-3 

miles.  There  were  2250  telegraph  offices  open.  By 
1870  the  figures  had  increased  to  112,191  miles  of 
wire,  54, 1 09  miles  of  line,  and  3972  offices,  which  were 
doing  a  business  annually  of  9,157,646  messages. 
The  year  1880  found  an  equally  marked  gain.  There 
were  253,534  miles  of  wire,  85,645  miles  of  line,  and 
9077  offices,  while  the  number  of  messages  annually 
transmitted  had  increased  to  29,216,509.  Six  years 
later  and  the  growth  was  astounding  in  its  rapidity : 
217  telegraph  companies  existed  throughout  the 
country,  20,899  offices  were  ready  to  receive  or 
transmit  messages,  and  671,002  miles  of  wire,  cov- 
ering 226,308  miles  of  line,  were  at  the  service  of 
the  operators.  Of  this  great  total  the  Western 
Union  Company  was  the  chief  quantity;  462,283 
miles  of  its  wires  were  included  in  the  671,002  esti- 


The  aggregate  assets  of  this  company  are  $125,- 
966,171,  and  the  capital  stock  outstanding  is  $95,- 
370,000,  of  which  $550,000  was  added  during  the 
last  year  for  the  purchase  of  the  lines  and  property 
of  the  American  Rapid  Telegraph  Company. 

To  these  statistics,  in  estimating  the  whole  im- 
portance of  the  telegraph  in  the  United  States, 
must  be  added  the  business  done  by  the  Postal  Tele- 
graph-Cable Company,  and  a  few  small  telegraph 
systems  in  various  parts  of  the  country.  I  have  at 
hand  no  particulars  of  the  amount  of  that  business, 
but  it  would,  perhaps,  be  fair  to  say  that  the  total 
telegraph  receipts  in  the  United  States  for  the  year 
1895  amounted  to  about  $25,000,000. 

The  important  part  played  by  the  telegraph  in  the 
development  of  the  world's  commerce  is  so  self- 


132 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


evident  as  to  need  little  demonstration.  Facilities 
for  rapid  transit  such  as  we  have  to-day  both  on 
land  and  water  would  of  themselves  have  accom- 
plished much,  it  is  true,  but  they  would  surfer  a  serious 
diminution  of  their  usefulness  were  the  vastly  more 
rapid  transmission  of  intelligence  impossible.  A 
grain  broker  in  Chicago  who  had  only  the  railroads 
and  the  Atlantic  liners  as  carriers  for  his  queries 
and  the  return  information  would  be  obliged  to 
wait  two  weeks  at  the  very  least  before  he  could 
hear  from  London.  Business  methods  to-day  pro- 
hibit such  delays.  The  buyer  in  California  must 
have  instant  communication  with  his  New  York 
house,  which  in  turn  must  be  equally  well  aware  of 
what  its  foreign  agents  are  doing.  The  telegraph 
and  the  cable  permit  this.  In  1840  the  total  exports 
and  imports  of  the  United  States  amounted  to  but 
$221,927,638.  The  year  the  first  telegraph  line 
was  built,  and  a  year  later,  showed  the  totals  even 
less,  $219,224,433  being  their  estimated  amount. 
Since  then,  while  each  decade  has  seen  improvement 
except  the  one  which  included  the  disastrous  Civil 
War,  the  subjoined  summary  will  show  the  added 
impetus  given  to  commercial  enterprise,  first  in  the 
decade  between  1845  an<i  I^55i  when  the  telegraph 
lines  of  the  country  sprang  into  prominence,  and 
secondly  in  the  period  between  1865  and  1875,  when 
the  transatlantic  cable  became  of  every-day  use. 


EXPORTS  AND  IMPORTS,  1845  TO   1895. 


YEAR. 


TOTAL  EXPORTS 
AND  IMPORTS. 


'§45 $219,224,433 

1855 476,718,21 1 

l8,65 404, 774,883 

"ZS 1,046448,147 

'°85 1,319,717,084 

I894 1,547,135,194 


These  figures,  significant  though  they  are,  still  fail 
to  show  the  greatest  benefit  accruing  from  the  tele- 
graph. This  is  in  the  money  it  saves.  Every  cause 
and  every  happening  that  affect  the  community,  its 
business,  its  crops,  its  affairs,  are  instantly  communi- 
cated to  the  farthest  comer  of  the  earth.  Nothing 
need  come  as  a  surprise.  The  distant  dealer  is  as 
well  posted  as  the  trader  on  the  ground,  and  he  oper- 
ates accordingly,  with  an  intelligence  that  saves  mil- 
lions every  month.  All  this  is  in  addition  to  the 
advantages  obtained  in  social  and  family  life  through 
it,  as  well  as  in  those  occupations  which  are  not 
primarily  commercial. 

Twenty-five  billion  dollars  are  to-day  represented 
by  the  internal  commerce  of  this  great  nation; 
$1,500,000,000  more  are  included  in  our  trade  with 
foreign  lands ;  a  merchant  marine  with  a  carrying  ca- 
pacity of  3,261,982  tons  now  flies  our  flag ;  railways 
with  a  mileage  of  nearly  180,000,  or  one  half  the  total 
mileage  of  the  world,  gridiron  our  continent ;  and  a 
population  more  prosperous  and  more  enterprising 
than  that  of  any  other  country  or  time  is  pushing 
steadily  onward.  All  these  have  come  to  fruition 
since  the  birth  of  the  telegraph.  With  their  advent 
and  growth  that  of  the  great  telegraph  system  of 
the  United  States  is  inseparably  linked  by  the  inter- 
dependence of  a  common  cause  and  effect.  Each 
has  rendered  the  other  possible.  The  end,  however, 
is  far  from  being  reached ;  and  when  the  wonders 
which  one  short  century  has  worked  are  consid- 
ered, the  futility  of  setting  limits  to  the  progress  of 
the  future  is  but  too  apparent.  The  movement  is 
all  in  advance,  and  daily  improvements  testify  to 
its  earnestness ;  but  its  ultimate  results  I  must  leave 
to  others  the  chronicle. 


CHAPTER   XX 

THE   TELEPHONE 


THE  word  "  telephone  "  in  its  original  use  was 
not  applied  to  the  transmission  of  speech  by 
the  use  of  the  electric  current.  The  word  is 
much  older  than  the  art  to  which  it  is  now  exclu- 
sively applied.  To  an  exhibition  of  the  transmission 
of  musical  vibrations  through  solids,  given  by  Wheat- 
stone  as  early  as  1821,  he  gave  the  name  of  "tele- 
phone concerts,"  and  certain  kinds  of  trumpets  for 
signaling,  used  as  early  as  1845,  were  called  tele- 
phones. Indeed,  the  name  was  at  one  time  applied 
by  the  Germans  to  the  common  speaking-tube. 

The  effort  to  transmit  sounds,  and  especially  musi- 
cal sounds,  suggested  the  possibility,  and  perhaps 
encouraged  the  hope,  of  the  transmission  of  articu- 
late speech  beyond  the  limits  to  which  it  may  be 
transmitted  through  the  natural  medium  of  its 
propagation,  the  air ;  but  the  hope  was  not  realized 
until  the  invention  of  Bell,  described  in  his  patent 
of  March  7,  1876.  In  that  patent  were  described 
and  claimed  a  method  of,  and  apparatus  for,  trans- 
mitting sound  by  means  of  an  undulatory  current 
of  electricity.  "  This  invention  solved  the  problem, 
long  labored  upon  by  inventors  and  scientific  men, 
of  the  transmission  of  human  speech  by  the  use  of 
the  electric  current,  and  laid  the  foundation  of  the 
art  of  speaking-telephony,  since  widely  introduced 
throughout  the  world." 

In  1836,  Dr.  Charles  G.  Page,  of  Salem,  Mass., 
an  examiner  in  the  Patent  Office  and  an  electrical 
inventor  of  note,  while  employing  a  rapidly  inter- 
rupted electrical  current  produced  by  the  ordinary 
vibrating  spring-tongue  circuit-breaker,  found  that 
if  this  intermittent  current  was  passed  through  the 
coils  of  an  electromagnet  the  latter  gave  forth  a 
musical  note  the  pitch  of  which  corresponded  to  the 
rapidity  of  the  interruptions;  the  law  of  acoustics 
being  that  after  air-vibrations  have  become  rapid 
enough  to  blend  together  as  a  continuous  musical 
sound,  an  increase  in  their  number  per  second  raises 
the  pitch  of  the  sound.  He  published  this  discovery 


under  the  name  of  "Galvanic  Music."  Although 
not  utilized  in  the  speaking-telephone,  this  served  to 
attract  the  attention  of  many  experimenters  to  the 
electrical  production  of  sound. 

In  1854,  Charles  Bourseul,  of  the  French  tele- 
graphic service,  suggested  that  the  circuit-breaking 
tongue  or  plate  might  perhaps  be  vibrated  by  the 
air-waves  produced  by  the  voice  of  a  speaker. 
Would  the  resulting  sound  at  the  distant  receiver  be 
articulation?  He  inclined  to  doubt  it;  but  he  said 
that  our  knowledge  of  the  precise  nature  of  articulate 
sound  was  too  meager  to  enable  us  to  answer  that 
question  a  priori,  and  the  subject  was  worth  experi- 
ment. In  the  same  year,  "  Didaskalia,"  a  periodical 
of  Frankfort-on-the-Main,  published  an  abstract  of 
Bourseul's  article,  and  Philip  Reis,  a  schoolmaster 
who  lived  at  Frankfort-on-the-Main,  then  took  up 
the  subject.  For  his  circuit-breaking  transmitter  he 
used  the  membrane  diaphragm  of  the  old  lover's 
telegraph  or  string-telephone,  so  mounted  as  to  make 
and  break  the  circuit  once  at  each  vibration.  For 
his  receiver  he  employed  Dr.  Page's  singing-magnet. 
He  hoped  to  transmit  speech,  and  his  efforts  at- 
tracted much  attention.  But  he  found  that  musical 
sounds  or  confused  noises  were  all  that  came  from 
his  receiver,  and  in  1863,  having  perfected  his  in- 
strument, he  put  it  on  the  market  as  a  musical 
telephone. 

Reis's  discoveries  contributed  nothing  toward  the 
speaking-telephone,  unless  it  be  the  suggestion  that 
the  diaphragm  of  the  lover's  telegraph  might  be  em- 
ployed as  a  part  of  an  electrical  apparatus.  Reis 
attracted  attention  to  the  subject,  however,  though, 
on  the  other  hand,  the  failure  of  both  Bourseul  and 
himself  after  ten  years  of  experiment  must  have  been 
very  discouraging  to  others.  In  1862  Helmholtz 
published  his  great  work  on  sound.  In  this  he 
showed,  by  direct  experimental  proof,  that  each 
articulate  sound  was  a  composite,  made  up  of  a 
fundamental  or  principal  tone  which  gave  volume 


133 


134 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


and  pitch  to  the  whole,  while  the  peculiar  character, 
or,  as  it  is  technically  called,  "  quality  "  or  "  form," 
which  distinguishes  one  articulate  sound  and  its  air- 
vibrations  from  another,  is  due  to  the  admixture  of 
a  considerable  number  of  much  feebler  tones,  called 
"  overtones,"  of  successively  higher  and  higher  pitch. 

These  materials — namely,  the  discovery  by  Helm- 
holtz  of  what  articulation  is,  and  the  proof  by  the 
experience  of  Reis  that  the  only  plan  thought  of  for 
its  transmission  was  a  failure — were  needed  for  the 
creation  of  the  speaking-telephone.  But  they  had 
been  widely  known  for  a  dozen  years  without  lead- 
ing to  that  invention,  when  Alexander  Graham  Bell, 
son  of  an  Edinburgh  professor  of  articulation,  and 
himself  a  teacher  in  Boston  of  articulation  to  deaf- 
mutes,  brought  them  to  bear  with  success  on  this 
problem.  In  his  patent  of  March  7,  1876,  Mr.  Bell 
stated  the  well-known  fact  that  an  intermittent  cur- 
rent, such  as  would  be  produced  by  a  circuit-breaker, 
would  reproduce  musical  pitch.  Then  he  showed 
that  a  current  which,  instead  of  being  interrupted, 
was  caused  to  vary  as  sound-waves  vary,  could 
transmit  and  reproduce  every  kind  of  sound  which 
sound-waves  could  convey,  including  vocal  sounds 
and  the  utterances  of  the  human  voice.  He  denned 
this  current  as  a  current  consisting  of  "  electrical  un- 
dulations, similar  in  form  to  the  vibrations  of  the  air 
accompanying  said  vocal  or  other  sounds,"  whence 
it  took  the  short  name  "  undulatory  current." 

An  early  and  noteworthy  public  exhibition  of 
Bell's  telephone  was  made  shortly  after  the  granting 
of  the  patent,  before  the  judges  at  the  Centennial 
Exhibition.  One  of  these  judges,  a  man  of  the 
highest  scientific  repute,  Sir  William  Thomson,  now 
Lord  Kelvin,  speaking  to  a  fellow-scientist  on 
the  evening  of  that  day,  said  of  Professor  Bell's 
invention,  "  What  yesterday  I  should  have  declared 
impossible  I  have  to-day  seen  realized."  And 
later,  addressing  the  British  Association,  after  de- 
scribing the  telephone,  he  said,  "Who  can  but 
admire  the  hardihood  of  invention  which  devised 
such  very  slight  means  to  realize  the  mathematical 
conception  that,  if  electricity  is  to  convey  all  the 
delicacies  of  quality  which  distinguish  articulate 
speech,  the  strength  of  the  current  must  vary  con- 
tinuously, and,  as  nearly  as  may  be,  in  simple  pro- 
portion to  the  velocity  of  a  particle  of  air  engaged 
in  constituting  the  sound?" 

Bell's  improved  instrument,  which  was  put  into 
commercial  use  early  in  1877,  still  remains  the  most 
perfect  articulator  in  the  world.  But  as  all  the 
electricity  employed  in  it  is  such  as  the  mere  force 
of  the  voice  itself  generates,— the  current  so  pro- 


duced is  usually  reckoned  as  not  over  1 0  <}0  0  0  part 
of  that  employed  on  an  ordinary  telegraph  line, — its 
sounds  are  feeble,  its  effects  easily  drowned  out  by 
disturbances,  and  the  instrument  is  therefore  not 
well  fitted  for  ordinary  commercial  use  as  a  trans- 
mitting-telephone,  where  the  listener  is  in  a  noisy 
place,  and  the  earth  below  and  a  network  of  neigh- 
boring wires  are  full  of  other  and  more  powerful 
currents. 

On  April  14,  1877,  Mr.  Emile  Berliner  filed  in 
the  Patent  Office  a  caveat,  and  on  July  20,  1877, 
Mr.  Edison  filed  an  application,  each  of  which  de- 
scribed what  we  now  know  as  the  speaking-micro- 
phone. In  this  instrument  the  voice,  acting  to  vary 
the  pressure  between  two  electrodes  in  contact  with 
each  other,  molds  the  flow  of  electricity  from  a 
battery  into  Bell's  undulatory,  speech-bearing  cur- 
rent. The  microphone  of  Berliner,  with  the  addi- 
tion of  carbon  contacts,  the  value  of  which,  as  dis- 
tinguished from  metal  contacts,  was  first  discovered 
by  Edison,  has  become  the  universal  transmitter  of 
the  world.  These  inventions  have  been  chiefly  used 
in  the  United  States  in  the  form  of  the  Blake  trans- 
mitter, an  instrument  of  beautiful  organization  and 
construction,  devised  in  the  summer  of  1878  by 
Mr.  Francis  Blake,  then,  or  not  long  before,  in 
charge  of  the  electrical  determination  of  longitudes 
for  the  government.  The  receiving-telephone,  made 
by  Mr.  Bell  in  1877,  still  remains  the  preferred  in- 
strument for  that  purpose. 

The  telephone  was  naturally  first  used  over  a  sin- 
gle wire  connecting  two  stations ;  but  the  possibility 
of  a  wider  use  was  immediately  perceived,  wherein 
a  number  of  such  wires,  practically  unlimited,  should 
be  so  connected  together  that  a  person  at  any  station 
of  such  a  system  could  hold  conversation  with  per- 
sons at  any  other  station,  and  the  "  exchange  "  arose. 
The  exchange  was,  naturally,  at  first  confined,  or  sub- 
stantially confined,  to  the  municipal  limits  of  single 
cities  or  towns.  It  spread  rapidly,  until  in  1884 
there  was  an  exchange  in  every  town  or  city  of 
10,000  inhabitants  or  over  in  the  United  States, 
and  of  course  in  many  towns  of  smaller  population. 
The  connection  of  neighboring  exchanges  with  one 
another  by  trunk-lines,  whereby  the  subscribers  in 
either  exchange  could  talk  with  the  subscribers  in 
any  other  exchange  of  the  group,  naturally  followed, 
and  this  in  an  ever- widening  circle,  until  in  1892  it 
had  become  possible  for  the  subscribers  to  the  ex- 
changes in  the  city  of  New  York  to  talk  with  the 
subscribers  to  the  exchanges  in  Chicago,  and  a  little 
later  the  system  of  exchanges  in  New  England  was 
connected  with  New  York,  and  thence  to  Chicago. 


JOHN  E.  HUDSON. 


ONE   HUNDRED   YEARS  OF  AMERICAN   COMMERCE 


IH 


The  line  from  New  York  to  Chicago  was  formally 
opened  to  the  public  on  the  i8th  of  October,  1892. 
The  connecting  of  these  cities,  and  the  furnishing  of 
apparatus  for  personal  conversation  between  them, 
was  such  an  addition  to  the  facilities  of  business  as, 
by  a  sort  of  common  consent,  to  be  recognized  as  a 
matter  of  public  concern,  and  the  formal  opening 
was  made  by  a  conversation  between  the  mayors  of 
the  respective  cities. 

As  exchanges  have  grown  and  lines  have  been 
extended,  new  questions  have  suggested  them- 
selves and  new  difficulties  have  arisen.  At  the  out- 
set, and  for  a  considerable  time  thereafter,  one  wire 
only  extended  from  the  central  office  to  the  premises 
of  each  subscriber,  the  ground  being  used  to  com- 
plete the  electrical  circuit,  as  in  telegraphy.  But 
this  opened  the  door  to  an  amount  of  interference 
from  other  currents, — the  earth-currents,  so  called, 
and  currents  like  those  from  electric  cars,  discharged 
into  the  earth, — which,  owing  to  the  extreme  delicacy 
and  sensitiveness  of  the  telephone,  seriously  impaired 
the  service,  and  often  rendered  conversation  impos- 
sible. This  difficulty  has  been  overcome  by  the  use 
of  metallic  circuits ;  that  is,  by  using  two  wires  to 
connect  the  central  office  with  each  subscriber's  prem- 
ises, and  ceasing  to  use  the  ground  as  a  "return." 
It  was  found,  however,  especially  in  the  longer 
lines,  that  when  a  number  of  wires  were  strung  on 
the  same  poles,  or  when  such  wires  were  paralleled 
by  wires  carrying  electric  light  or  power  currents, 
there  were  produced — by  a  subtle  sympathetic  effect 
called  induction — certain  disturbances  which  con- 
fused the  speech  and  often  rendered  it  unintelligible. 

This  was  overcome  by  changing  the  relative  posi- 
tion of  the  wires  in  different  parts  of  the  line.  As 
has  been  explained,  each  circuit  consists  of  two 
wires.  On  each  line  of  poles  are  a  number  of  cir- 
cuits. At  certain  measured  distances,  determined  in 
accordance  with  rules  deduced  from  theory  and 
from  experiment,  each  wire  crosses  over  and  changes 
places  with  the  others.  The  plan  is  that  just  as 
much  as  one  line  influences  another  to  generate 
these  counter-currents  on  one  part  of  the  route,  just 
so  much  shall  another  part  of  the  same  line  influence 
another  part  of  that  same  other  line  to  generate 
counter-currents,  but  in  a  different  direction,  so  that 
these  "  induced "  currents  shall  exactly  neutralize 
and  destroy  one  another.  If  one  will  endeavor  to 
think  out  how,  in  a  long  line  of  fifty  or  a  hundred 
wires  (for  some  of  the  larger  routes  carry  that 
greater  number  on  the  poles),  each  wire  can  at  fre- 
quent intervals  be  so  transposed  that  each  line  shall 
thus,  by  balancing,  protect  every  other  one,  and 


shall  be  itself  protected  from  every  other,  some  idea 
of  the  difficulty  of  hitting  upon  a  perfect  plan  will 
be  realized.  When  wires  are  made  up  into  cables 
the  same  result  is  obtained  by  twisting  each  pair  of 
wires  together,  and  then  "  laying  up  "  these  twisted 
pairs  according  to  a  rule  which  has  been  carefully 
studied  out  to  accomplish  the  desired  result. 

There  was  still  another  difficulty,  experienced  on 
long  lines  especially.  The  telephone  transmitter 
produces  in  that  part  of  the  line  where  it  is  situated 
Bell's  speech-carrying  variations  of  current.  These 
consist  of  alternate  increases  and  decreases  of  cur- 
rent exactly  corresponding  to  the  ever- varying  sound- 
waves ;  and  when  these  act  upon  the  receiver  the 
spoken  word  is  reproduced.  These  changes,  neces- 
sary for  articulation,  corresponding  to  what  are  called 
overtones,  succeed  one  another,  in  telephony,  at  the 
rate  of,  say,  2000  to  the  second.  Now  it  is  found 
in  a  long  line  that  this  change  of  electrical  con- 
dition takes  place  at  the  distant  end  with  a  cer- 
tain sluggishness,  so  that  before  there  has  been  time 
for  an  increase  to  fully  manifest  itself  there,  the  suc- 
ceeding diminution  comes  along.  Thus  the  rise  and 
fall  of  current  at  the  end  of  a  long  line  becomes  so 
insufficient  or  so  inaccurate  that  the  spoken  words 
are  not  clearly  heard.  This  difficulty,  which  is  due 
in  part  to  other  causes,  is  known  as  "retardation." 
In  underground  lines,  as  formerly  constructed,  the 
difficulties  from  both  induction  and  retardation  are 
increased  from  fifty  to  one  hundred  fold  for  equal 
distances.  To  meet  the  trouble  from  retardation 
the  character  of  the  lines  must  be  changed,  and 
this  has  been  done. 

What  the  change  should  be  was  by  no  means  a 
simple  matter  to  determine.  Diminishing  the  sur- 
face area  of  the  wire  per  unit  of  length  lessened  the 
evil  of  retardation,  other  things  being  equal.  But 
when  a  smaller  wire  was  used  other  things  did  not 
remain  equal,  because  the  smaller  wire  would  not 
carry  as  much  electricity  per  unit  of  time,  and  this 
aggravated  the  trouble.  Proximity  of  the  wires  of 
one  circuit  to  other  wires  increases  the  evil ;  close 
proximity  of  the  wires  to  the  earth  enormously  in- 
creases it.  Wrapping  the  wires  with  any  of  the 
usual  insulating  coverings  increases  it.  But  the 
wires  cannot  be  far  apart  on  pole  lines,  and  in  a 
cable  the  wires  must  be  embedded  in  an  insulator, 
must  be  packed  closely  together,  and  must  be  laid 
under  water  or  underground.  The  capacity  of  iron 
to  become  magnetized  also  unfitted  it  for  use  in 
telephony.  Balancing  all  these  evils,  advantages, 
and  necessities,  the  plan  adopted  has  been  to  em- 
ploy metallic  circuits,— that  is,  two  wires  for  each 


136 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


set  of  instruments,— to  use  copper  as  the  material, 
and  to  take  very  large  wire  for  aerial  or  overhead  pole 
lines,  but,  on  the  other  hand,  decidedly  small  wire 
for  cables.  The  size  of  the  wire  for  overhead  lines 
varies  with  the  length  of  the  line.  Thus,  while  the 
copper  wire  used  between  New  York  and  Boston 
weighs  172  pounds  to  the  mile,  wire  weighing  435 
pounds  to  the  mile  is  used  between  New  York 
and  Chicago,  so  that  each  of  the  several  metallic 
circuits  uniting  Boston  with  Chicago  contains  more 
than  a  million  pounds  of  copper. 

As  wires  have  multiplied  there  has  been  a  strong 
public  demand  that  they  should  go  underground,  at 
least  in  the  more  thickly  settled  portions  of  the  larger 
cities.  A  beginning  on  underground  work  was  made 
in  1884.  On  the  ist  of  January,  1885,  there  were 
1225  miles  of  wire  underground,  and  on  the  ist  of 
January,  1895,  149,592  miles  of  underground  wire, 
in  some  sixty  cities.  As  already  stated,  the  diffi- 
culties experienced  from  retardation  and  induction 
are  greatly  increased  in  underground  work,  and 
hence  the  length  of  buried  conductor  that  can  be 
used  is  limited. 

Experience  having  made  manifest  the  difficulties 
which  have  been  detailed,  and  the  remedies  having 
been  learned,  they  were  at  once  applied.  But  before 
they  were  learned  much  work  had  been  done,  and  to 
bring  this  up  to  the  proper  standard  a  very  general 
rebuilding  was  entered  upon,  not  only  of  lines,  which 
had  to  be  changed  from  iron  to  copper  and  con- 
verted into  metallic  circuits,  but  also  of  switchboards 
and  other  apparatus. 

As  there  has  been  improvement  of  lines,  there  has 
also  been  a  steady  improvement  of  apparatus,  and 
the  result  is  that  it  is  now  possible  from  any  properly 
appointed  station  to  talk  north  and  east  to  Augusta, 
Me.,  north  to  Concord,  N.  H.,  Buffalo,  and  Mil- 
waukee, west  to  Chicago,  and  south  to  Washington, 
Cincinnati,  Nashville,  and  Memphis ;  and  of  course 
to  the  principal  cities  intermediate.  This  system  of 
telephonic  intercommunication  is  by  far  the  most  ex- 
tensive in  the  world.  It  may  be  interesting  to  note 
that  within  that  territory  live  and  do  business  some- 
thing more  than  one  half  of  the  whole  population 
of  the  United  States,  so  that  it  is  hardly  a  figure  of 
speech  to  say  that  one  half  the  people  of  the  country 
are  within  talking  distance  of  one  another. 

The  development  and  present  extent  of  the  tele- 
phone business  are  clearly  shown  by  an  examination 


of  its  statistics.  On  January  i,  1881,  there  were  in 
use  in  the  United  States,  for  telephone  purposes, 
29,714  miles  of  wire.  Ten  years  later,  January  i, 
1891,  the  wire  mileage  had  reached  331,642  ;  and 
on  January  ist  of  the  present  year  it  had  grown  to 
577,231.  During  the  current  year  there  has  been  a 
further  increase,  bringing  the  total  above  600,000 
miles. 

It  will  be  remembered  that  the  electric  speaking- 
telephone  became  known  in  the  spring  of  1876. 
On  December  20,  1877,  5187  had  gone  into  use  in 
the  United  States.  Ten  years  later  the  number  had 
increased  to  380,277.  The  number  in  use  October 
20,  1895,  was,  approximately,  660,817. 

On  January  i,  1881,  the  total  number  of  exchange 
subscribers  was  47,880.  On  the  same  date  in  1891 
this  number  had  grown  to  202,931,  and  on  January 
ist  of  the  present  year  it  had  still  further  increased 
to  243,432. 

Statistics  as  to  the  number  of  connections  or 
conversations  by  telephone  between  exchange  sub- 
scribers date  back  to  1884  only.  During  1884  it 
was  215,280,000,  the  yearly  rate  being  based  on 
daily  use.  January  i,  1895,  the  estimated  number 
of  exchange  connections  daily  in  the  United  States, 
made  up  from  actual  count  in  most  of  the  ex- 
changes, was  2,088,152,  or  at  the  rate  of  about 
670,000,000  per  annum.  Not  only  has  there  been 
an  increase  in  the  number  of  subscribers  to  the 
telephone,  but  there  has  also  been  a  steady  increase 
in  the  average  daily  use  by  each  subscriber.  The 
average  number  of  calls  per  subscriber  per  day 
was,  in  1885,  five  and  one  half;  in  1895,  eight 
and  one  half. 

With  these  statistics  it  will  be  interesting  to  com- 
pare the  statistics  of  the  larger  features  of  the  busi- 
ness as  it  has  been  established  in  the  principal  foreign 
countries.  There  are  in  the  United  States  about 
250,000  subscribers.  The  British  Isles,  with  more 
than  half  our  population,  have  less  than  75,000. 
France,  with  a  population  of  38,000,000,  has  but 
25,000  subscribers,  or  about  as  many  as  New  York 
and  Boston  combined.  Germany  makes  a  better 
showing,  having  90,000  subscribers  in  a  population 
of  50,000,000  ;  but  this  is  less  than  one  half  the  num- 
ber she  should  have  to  bring  her  up  to  our  standard. 
Austro- Hungary,  with  40,000,000  people,  has  but 
20,000  subscribers  ;  and  Russia,  with  over  108,000,- 
ooo  inhabitants,  only  9000. 


CHAPTER   XXI 

THE   EXPRESS 


r  I  AHE  familiar  picture  of  the  old-fashioned 
stage-coach  and  horses  standing  in  front  of 

L  an  ancient  tavern,  ready  to  transport  pas- 
sengers and  merchandise  to  some  distant  place, 
with  the  driver  perched  high  on  the  first  seat,  and 
seemingly  conscious  of  his  individual  prominence  as 
the  conductor  of  a  very  essential  method  of  convey- 
ance, quite  clearly  brings  to  view  the  manner  in 
which  the  general  intercourse  of  this  country  was 
chiefly  transacted  during  its  early  years ;  and  it  par- 
ticularly suggests,  through  the  personality  of  the 
driver,  the  means  by  which  small  parcels  were  sent, 
and  the  various  errands  or  commissions  he  performed, 
for  they  were  then  customarily  intrusted  to  that 
channel  of  communication  between  localities.  The 
vessels  then  engaged  in  the  carrying  trade  along  the 
coast  and  on  the  lakes,  rivers,  and  canals  likewise 
afforded  a  further  method  of  transportation  between 
districts  which  were  more  readily  accessible  by  water 
than  by  land,  and  to  the  masters  of  such  vessels 
were  confided  duties  similar  to  those  required  of  the 
stage  drivers. 

Such  methods  sufficed  until  there  came  into  oper- 
ation a  series  of  railways,  which,  with  their  greater 
speed  and  convenience,  necessarily  displaced  the 
stage-coach  lines ;  and  the  obligations  theretofore 
assumed  by  the  stage  drivers  were  naturally  trans- 
ferred to  the  conductors  of  the  railway  trains. 
Many  of  those  conductors  had  been  stage  drivers, 
and  they  were  employed  by  the  railways  because  of 
their  general  acquaintance  with  the  people,  and  their 
familiarity  with  traffic  between  the  cities  and  towns. 
The  advent  of  the  railways  had  given  an  unusual 
impetus  to  the  commercial  relations  of  the  country, 
so  that,  on  the  opening  of  a  through  route  by  water 
and  rail  from  New  York  to  Boston,  the  merchants, 
bankers,  or  others  who  wished  to  send  small  parcels 
enlisted  the  services  of  not  alone  the  railway  and 
steamboat  employees,  but  the  assistance  of  their 
friends  traveling  between  those  cities;  for  New 


York  and  Boston  were  then  two  of  the  most  impor- 
tant places  in  the  country,  their  interchange  of  busi- 
ness was  large,  and  no  opportunity  was  neglected  to 
secure  its  prompt  transaction.  The  general  demand 
thus  made  upon  the  time  of  the  railway  and  steam- 
boat employees  ultimately  necessitated  a  division  of 
their  labors ;  and  eventually  they  were  required  to 
make  a  choice  between  acting  as  agents  of  the  pub- 
lic or  as  servants  of  their  respective  companies. 

One  of  the  earliest  railways  to  enforce  this  distinc- 
tion was  the  Boston  and  Worcester  Railway,  of 
Massachusetts.  That  road  had  in  its  service  a  con- 
ductor by  the  name  of  William  F.  Harnden,  who 
was  one  among  the  many  conductors  employed  by 
it  and  the  public  as  agents  in  the  transaction  of  their 
various  interests.  Harnden  thought  best  to  sever 
his  relations  with  the  railway,  came  to  New  York  in 
1838,  and  met  James  W.  Hale,  then  proprietor  of 
a  reading-room  in  Wall  Street,  which  was  largely  at- 
tended by  merchants  and  travelers.  With  him  Harn- 
den discussed  the  advisability  of  separating  from 
the  general  railway  traffic  the  business  of  carrying 
parcels  and  fulfilling  orders,  and  converting  it  into 
an  individual  enterprise.  Harnden's  previous  expe- 
rience in  a  similar  respect  enabled  him  to  perceive  a 
fair  opening  for  his  own  benefit  and  for  that  of  the 
public  in  the  establishment  of  an  independent  ser- 
vice between  New  York  and  Boston ;  and,  with  the 
encouragement  of  Hale,  the  express  business,  as 
now  conducted,  then  and  there  had  its  conception. 

Acting  on  that  determination,  Harnden  promptly 
effected  arrangements  with  the  railroad  and  steam- 
boat companies  forming  the  through  line  via  Provi- 
dence, and  on  February  23,  1839,  published  adver- 
tisements in  the  New  York  and  Boston  newspapers 
announcing  that  on  March  4th  ensuing  he  would 
begin  personally  to  conduct  an  "  express "  service 
between  the  two  cities,  which  service  would  embrace 
the  purchasing  of  goods,  collection  of  drafts,  notes, 
and  bills,  and  the  carriage  of  small  parcels.  The 


137 


138 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


trip  was  made  from  Boston  to  New  York  as  out- 
lined, and  was  then  followed  by  a  regular  service 
three  or  four  times  a  week. 

Thus  the  first  express,  actually  known  by  that 
name,  had  its  birth.  And  here  it  should  be  stated 
that,  although  Harnden  was  first  to  start  an  express 
between  Boston  and  New  York,  there  were  at  the 
same  time  others  engaged  in  a  similar  occupation 
throughout  New  England,  having  been  attracted  to 
that  new  field  of  industry  by  the  opening  and  ex- 
tension of  railway  lines.  Among  those  who  then 
embarked  in  the  business  was  Alvin  Adams,  who 
came  from  Vermont  to  Boston  early  in  1840,  and 
shortly  afterward  determined  upon  the  introduction 
of  a  route  between  Boston  and  New  York,  via  the 
Norwich  line.  Adams  duly  advertised  his  purpose, 
and  on  May  4th  in  that  year  began  the  express  which, 
under  his  name,  has  since  become  so  widely  known. 

In  a  short  time  the  express  routes  between  New 
York  and  Boston  had  attracted  considerable  atten- 
tion, their  facilities  were  regularly  utilized  by  the 
general  public,  including  the  financial  institutions  of 
both  cities,  and  the  transportation  companies  cheer- 
fully assisted  in  their  operations,  for  the  enterprise 
had  relieved  their  employees  of  extra  labor,  and 
materially  added  to  their  revenues,  besides  taking 
from  them  a  large  amount  of  responsibility.  The 
readiness  with  which  the  services  offered  by  Harn- 
den and  Adams  had  been  accepted,  and  the  confi- 
dence displayed  in  intrusting  to  them  valuable 
packages  and  large  sums  of  money  for  transmission, 
are  particularly  noteworthy  facts,  as  those  men  at 
the  inauguration  of  the  business  were  almost  un- 
known in  mercantile  affairs.  It  was  evident  they 
had  no  financial  resources  with  which  to  meet  losses 
to  property  in  their  care,  and  their  only  stock  in 
trade  consisted  of  the  special  privileges  which  each 
had  obtained  from  the  railroad  and  steamboat  com- 
panies for  the  transaction  of  their  business ;  but  they 
soon  earned  a  reputation  for  efficiency  and  integrity 
that  was  aptly  described  in  the  proverbial  phrase, 
"  with  the  promptness  and  fidelity  of  an  expressman." 

The  success  of  those  lines  naturally  led  to  the 
formation  of  others,  and  from  1840  to  1845  express 
routes  were  opened  from  New  York  to  Albany, 
Philadelphia,  Baltimore,  Washington,  Buffalo,  Pitts- 
burg,  Detroit,  Chicago,  Cincinnati,  Louisville,  St. 
Louis,  and  New  Orleans,  connected  with  which  were 
such  other  expressmen  as  William  B.  Dinsmore, 
Henry  Wells,  Edwards  S.  Sanford,  Samuel  M.  Shoe- 
maker, Johnston  Livingston,  and  William  G.  Fargo. 

At  that  time  there  were  few  railroads  in  the  East, 
and  none  beyond  Pittsburg ;  and  transportation  be- 


tween prominent  localities  in  the  West  was  almost 
wholly  conducted  over  the  great  waterways  of  the 
Ohio,  Mississippi,  and  Missouri  rivers,  with  their 
tributaries,  which  included  canals  then  recently 
completed  in  several  of  the  States  to  connect  those 
rivers  with  the  lakes.  These  formed  the  most 
frequently  traveled  routes  of  communication  between 
the  West  and  the  East,  and  the  express  was  duly 
established  thereon.  Within  the  next  few  years  rail- 
road lines  were  rapidly  constructed  throughout  the 
country,  and  by  them  the  express  was  likewise  car- 
ried, so  that  its  scope  was  thus  steadily  enlarged  in 
all  directions.  The  great  trunk-lines  which  now 
cover  the  United  States  had  not  then  been  projected, 
and  such  railroads  as  were  at  that  time  in  operation 
consisted  of  local  and  independent  routes,  widely 
scattered,  and  without  connection  except  that  which 
might  be  had  by  steamboat  or  stage.  The  express- 
men, observing  the  necessity  for  through  and  contin- 
uous facilities  from  point  to  point,  however  distant, 
arranged  to  give  the  public  that  very  essential  ser- 
vice ;  and  in  bridging  these  intervals  they  for  a  time 
called  themselves  "  forwarders,"  in  analogy  to  the 
forwarding  business  as  theretofore  conducted,  and 
which  had  been  the  receipt  and  delivery  of  merchan- 
dise between  two  carriers  not  otherwise  connected. 

The  important  manufacturing  interests,  as  well  as 
the  largest  firms,  principally  located  in  the  Eastern 
and  Middle  States,  were  during  this  period  forward- 
ing supplies  for  the  country  in  general  by  railroad 
freight  and  by  vessel — such  supplies  being  most 
frequently  sent  to  large  cities,  particularly  in  the 
South  and  West,  for  further  distribution ;  but  with 
the  inauguration  by  the  express  of  continuous  lines, 
those  shipments  were  made  directly  from  point  to 
point,  so  that  the  outlying  sections  of  the  country, 
which  had  not  theretofore  had  any  considerable 
business  relations  with  the  important  cities,  were 
brought  into  close  touch  with  them.  In  then 
endeavoring  to  increase  its  business  the  express 
naturally  became  not  only  solicitor,  purchasing 
agent,  and  forwarder,  but  was,  in  a  degree,  respon- 
sible for  any  commercial  credit  that  might  thus  be 
extended  through  its  influences.  The  express  also 
undertook  the  carriage  of  letters ;  and  the  public, 
quick  to  appreciate  such  service,  very  promptly 
availed  of  it  in  preference  to  that  of  the  mail ;  but 
the  venture  met  with  opposition  on  the  part  of  the 
government,  and  was  ultimately  abandoned. 

Soon  after  the  discovery  of  gold  in  California  in 
1848,  when  great  numbers  of  people  went  there  to 
assist  in  developing  the  resources  of  that  region,— in 
which  the  whole  country  was  interested, — the  express 


LEVI  C.  WEIR. 


ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


readily  anticipated  their  necessities  for  prompt  and 
reliable  commercial  intercourse  with  the  East  by 
opening  agencies  in  San  Francisco,  and  at  the  vari- 
ous mining  camps  on  the  Pacific  coast,  for  the  trans- 
mission of  packages,  money,  and  gold-dust,  and  for 
the  transaction  of  a  banking  business. 

For  several  years  just  previous  to  1854,  the  tend- 
ency of  the  principal  expresses  had  been  toward 
consolidation  of  interests,  as  it  was  believed  that 
much  better,  more  prompt,  and  less  expensive  service 
could  be  rendered  by  such  association.  Accord- 
ingly, in  that  year,  through  the  efforts  of  Adams, 
Dinsmore,  Sanford,  and  others,  the  routes  of  Harn- 
den's  Express,  the  lines  of  several  minor  concerns  in 
the  Eastern  States,  and  those  on  the  steamers  run- 
ning from  New  York  to  Charleston,  Savannah, 
Mobile,  and  New  Orleans  were  combined  with  the 
express  of  Adams  &  Company,  under  the  title  of 
the  Adams  Express  Company.  Alvin  Adams  be- 
came president,  William  B.  Dinsmore  vice-president, 
and  a  board  of  directors  was  formed,  of  which 
Edwards  S.  Sanford,  Samuel  M.  Shoemaker,  Johns- 
ton Livingston,  and  others  were  members.  In  this 
year,  also,  Wells,  Livingston,  Fargo,  and  Butterfield, 
through  a  similar  incorporation  of  lines  extending 
from  the  East,  via  Albany,  Buffalo,  and  the  lakes, 
to  the  far  West,  organized  the  American  Express 
Company,  with  Henry  Wells  as  president,  John 
Butterfield  vice-president,  William  G.  Fargo  secre- 
tary, Johnston  Livingston  and  Alexander  Holland 
directors,  and  Daniel  Butterfield,  James  C.  Fargo, 
and  Charles  Fargo  superintendents.  Likewise  in 
1854  the  United  States  Express  Company  was 
formed  by  Kip,  Barney,  and  Marsh,  to  operate  an 
express  over  the  then  recently  completed  line  of  the 
New  York  and  Erie  Railway,  and  other  routes 
extending  farther  into  the  West.  D.  N.  Barney 
was  made  president,  H.  Kip  became  superintendent, 
and  T.  B.  Marsh  treasurer.  About  that  time,  also, 
Wells,  Livingston,  Fargo,  Barney,  and  others  intro- 
duced another  express  on  the  Pacific  coast,  under 
the  title  of  Wells,  Fargo  &  Company,  to  form  a 
through  connection,  both  overland  and  by  water, 
with  the  East.  During  the  next  few  years  several 
expresses  operated  stage  lines,  and  the  famous 
"  Pony  Express,"  between  St.  Louis  and  San  Fran- 
cisco, Wells,  Fargo  &  Company,  however,  being  the 
most  prominent  among  them ;  and  in  1858  that  con- 
cern, through  an  association  with  such  lines,  formed 
the  Overland  Mail  Company,  which  until  the  comple- 
tion of  the  Union  Pacific  Railroad  exclusively  carried 
the  United  States  mails  between  the  Missouri  River 
and  the  Pacific  coast.  In  1855,  under  the  title  of  the 


National  Express  Company,  there  were  organized 
several  express  routes  which  had  been  operated  be- 
tween New  York,  Albany,  Troy,  Saratoga,  White- 
hall, Rutland,  and  Montreal.  D.  N.  Barney  was 
made  president,  J.  A.  Pullen  general  manager,  and 
E.  H.  Virgil  superintendent.  Some  time  thereafter, 
Johnston  Livingston  and  L.  W.  Winchester,  previ- 
ously identified  with  other  companies,  became  active 
in  its  management. 

These  consolidations  of  routes,  which  connected 
the  principal  sections  of  the  country  and  brought 
together  in  a  common  enterprise  such  bright  and 
energetic  men  as  those  mentioned  were  known  to 
be,  laid  the  foundation  for  the  thoroughly  organized 
service  of  the  express  as  it  exists  to-day.  The 
express  had  then  become  a  recognized  necessity  in 
the  commercial  and  individual  transactions  of  the 
country;  its  lines  had  ramified  in  every  direction, 
until  nearly  the  whole  United  States  was  traversed 
by  them ;  it  had  attracted  to  itself  sufficient  capital 
to  place  it  on  a  firm  financial  basis,  and  obligations 
to  insure  the  safe  and  speedy  transmission  of  mer- 
chandise, valuables,  and  money  were  readily  as- 
sumed, so  that  when  loss  or  damage  did  occur,  due 
reparation  was  promptly  made;  and  it  is  current 
history,  extending  from  that  time  until  to-day,  that 
whenever  goods  or  valuables  in  the  care  of  the 
express  have  been  tampered  with  or  stolen,  it  has 
been  swift,  sure,  and  untiring  in  its  pursuit  of  the 
offenders  until  adequate  punishment  was  effected. 

In  1 86 1  the  Southern  Express  Company  was 
organized  to  operate  in  the  Southern  States,  and 
Henry  B.  Plant  became  its  president. 

Upon  the  breaking  out  of  the  War  of  the  Rebel- 
lion the  express  was  the  only  means  of  communi- 
cation between  the  soldiers  in  the  field  and  their 
friends  at  home.  For  certain  of  the  States  it  acted 
as  the  gatherer  of  the  soldiers'  votes,  and  transmitted 
them  to  the  capitals  of  such  States.  The  new 
securities  of  the  government,  which  were  so  largely 
purchased  by  our  people,  were  forwarded  by  the 
government  through  the  express — a  choice  made 
with  full  knowledge  of  the  fact  that  the  express 
afforded  greater  safety  than  the  mail.  The  inter- 
course thus  established  was,  at  the  solicitation  of 
the  government,  continued  after  the  war  had  ceased, 
and  at  its  further  request  a  contract  was  made  with 
the  Adams  Express  Company,  acting  for  itself  and 
the  other  express  companies,  by  which  the  trans- 
mission of  all  the  securities  and  moneys  of  the  gov- 
ernment was  confided  to  the  express.  This  function 
of  the  express  was  especially  noted  in  the  award 
which  was  made  at  the  Columbian  Exposition  to  the 


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ONE   HUNDRED  YEARS  OF  AMERICAN   COMMERCE 


Adams  Express  Company,  and  the  testimonial  con- 
cluded thus:  "The  Adams  Express  Company  has, 
by  the  faithful  performance  of  every  trust  reposed 
in  it,  and  the  discharge  of  duties  devolving  upon  it, 
enlarged  its  business  to  the  grand  dimensions  it  now 
enjoys,  and  has  achieved  the  enviable  position  of  a 
pattern  and  guide  for  all  similar  corporations." 

The  further  development  of  the  express  is  remark- 
able for  the  introduction  and  perfection  of  a  number 
of  facilities  necessary  to  meet  the  constantly  increas- 
ing demands  of  our  70,000,000  people, — features 
of  transportation  and  attendant  services  that  are 
peculiarly  its  own, — and  chief  among  which  may  be 
mentioned  its  wagon  service,  now  to  be  found  on 
almost  every  avenue  or  street  of  our  cities,  towns, 
and  villages ;  and,  in  conjunction  therewith,  its  em- 
ployment of  special  cars  or  trains  for  transportation 
of  express  matter  at  high  speed  between  the  princi- 
pal cities.  It  has  to  a  great  extent  created  the  busi- 
ness of  transporting  varieties  of  game,  poultry,  fish, 
oysters,  fruit,  and  vegetables  to  localities  where  they 
are  not  usually  obtainable ;  it  has  originated  a  novel 
method  of  selling  goods  for  merchants,  by  collecting 
on  delivery  the  amount  of  the  invoice  and  returning 
the  cash  to  the  shipper ;  it  has  improved  the  methods 
of  collecting  the  proceeds  of  negotiable  paper,  and 
assumes  therewith  the  responsibility  of  an  indorser; 
it  has  created  and  affords  the  only  efficient  means 
for  the  safe  transportation  of  moneys  and  valuables 
intrusted  to  it  by  the  general  public,  the  banks,  the 
railroads,  and  the  government,  and,  as  indicating 
the  general  recognition  of  this  specially  important 
feature,  it  may  be  stated  that  during  a  recent  year 
there  were  sent  through  the  express  $2,500,000,000, 
and  similarly  shipped  by  the  government  $1,500,- 
000,000,  making  a  total  carriage  of  $4,000,000,000 
in  money,  no  part  of  which  was  lost  in  transit ;  it 
has  introduced  at  40,000  agencies  the  express  money- 
order  system,  which  thus  meets  almost  every  citizen 
of  the  United  States  at  his  residence  or  place  of 
business,  and  there  affords  him  a  handy  and  safe 
means  for  transmitting  his  money  to  any  locality, 
such  money-orders  being  universally  convertible  into 
cash — a  convenience  not  otherwise  obtainable,  for 
postal  money-orders  are  only  purchasable  and 
redeemable  at  large  and  important  offices.  This  is 
an  accommodation  also  impossible  for  the  banks  to 
render,  as  they  are  located  at  less  than  8000  points. 
The  express  has  improved  the  facilities  for  immedi- 


ate transportation  of  foreign  goods  from  the  port  of 
entry  to  destination,  by  accepting  and  carrying  them 
under  heavy  bonds  to  the  government. 

These  are  some  of  the  features  of  the  express 
which  distinguish  its  services  from  mere  acts  of 
transportation,  and  indicate  that  its  facilities  cover  a 
much  wider  range  of  operations  than  originally  de- 
signed, particularly  such  as  are  not  afforded  by  any 
common  carrier,  and  which  necessitate  the  assump- 
tion of  obligations  and  liabilities  not  contemplated 
by  any  other  agency  of  commerce. 

The  great  lines  of  railway  communication  are  a 
necessary  adjunct  to  the  successful  conduct  of  the 
express  business,  but  they  are  an  adjunct  only. 
Were  the  express  dissolved  the  railway  lines  could 
not  supply  the  needs  of  the  public.  There  is  an 
interval  between  the  act  of  transportation  and  the 
demands  of  the  public  which  railway  companies  do 
not  fill,  and  were  not  organized  to  fill,  and  which 
renders  the  express  so  essential  to  the  general  wel- 
fare of  the  community.  The  express,  in  its  turn,  is 
among  the  most  efficient  supporters  of  the  railway 
systems ;  it  purchases  the  right  of  transportation  at 
wholesale,  and  sells  it  at  retail  to  the  public,  at  prices 
fairly  remunerative  and  universally  accepted. 

In  round  numbers,  the  routes  of  the  express  now 
cover  200,000  miles  of  railroad,  steamboat,  and 
stage  lines  ;  the  number  of  packages  of  merchandise 
annually  carried  is  over  100,000,000;  the  number 
of  money  packages  transported  is  20,000,000 ;  the 
number  of  money-orders  issued  is  7,000,000 ;  it  em- 
ploys 50,000  men  at  40,000  agencies,  uses  15,000 
horses  and  6000  vehicles,  and  it  has  an  aggregate 
capital  of  over  $60,000,000. 

And  now,  when  consideration  is  given  to  the 
prominence  achieved  by  the  express  in  the  history 
of  this  country  through  the  services  it  has  rendered, 
not  alone  to  the  people  at  large,  but  to  the  United 
States  government,  there  will  be  no  hesitation  in 
acknowledging  that  its  usefulness  may  not  be  mea- 
sured by  any  ordinary  standard  of  comparison ;  it  has 
constantly  aided  commerce  by  opening  new  markets 
for  the  sale,  purchase,  and  distribution  of  the  pro- 
ducts and  manufactures  of  the  country,  and  has 
promoted  individual  communications  and  financial 
transactions  to  an  extent  not  attainable  by  any  other 
means ;  it  is  distinctively  of  American  birth,  and 
not  elsewhere  are  there  similar  instrumentalities  so 
combined  in  one  efficient  and  complete  system. 


CHAPTER  XXII 

THE   STREET-RAILWAYS   OF  AMERICA 


IT  is  not  necessary  to  turn  back  the  pages  of  his- 
tory a  century  to  present  a  complete  account  of 
the  inception  and  development  of  street-railways 
in  the  United  States  or  the  world.  The  first  horse-car 
ever  known  appeared  upon  the  street  in  New  York 
as  late  as  1832,  but  the  idea  of  conveying  people  in 
vehicles  over  iron  rails  was  put  to  very  little  practi- 
cal use  until  nearly  twenty  years  later.  The  history 
of  street-railways  in  America,  therefore,  is  practi- 
cally confined  to  the  last  half-century;  and  yet  there 
are  now  in  the  United  States  nearly  1000  street-rail- 
way systems,  with  a  total  mileage  of  nearly  14,000, 
and  a  capitalization  exceeding  the  enormous  sum 
of  $1,300,000,000.  These  simple  figures,  of  such 
magnitude  as  to  be  almost  impossible  of  compre- 
hension, are  sufficient  to  indicate  the  growth  and 
extent  of  the  street-railway  service  of  this  country. 

This  extraordinary  development  of  the  idea,  con- 
ceived by  John  Stephenson,  of  placing  the  wheels 
of  an  omnibus  upon  iron  rails  instead  of  dragging 
them  over  cobblestones,  may  be  divided  into  three 
parts :  First,  street-railways  operated  with  horses  as 
separate  organizations;  second,  the  substitution  of 
mechanical  traction  by  means  of  a  cable ;  third,  the 
inauguration  of  electricity  as  a  motive  power,  with 
all  that  the  adaptation  of  this  wonderful  agency  to 
practical  uses  conveys  both  for  the  present  and  the 
future. 

Sixty-five  years  ago,  there  lived  in  New  York  a 
man  who  had  served  his  apprenticeship  and  begun 
work  for  himself  as  a  builder  of  carriages.  He  was 
only  twenty- four  years  old.  His  name  was  John 
Stephenson.  That  he  built  strong  and  handsome 
coaches  while  engaged  in  that  occupation  is  evi- 
denced by  the  world-wide  reputation  which  he 
subsequently  acquired.  That  he  was  not  content  to 
pursue  that  occupation  in  the  stereotyped  manner  of 
his  predecessors  is  shown  by  the  fact  that  before 
reaching  the  age  of  twenty-five  he  conceived  the 


idea  of  transporting  passengers,  as  millions  are 
transported  to-day,  over  rails  laid  upon  the  pave- 
ments of  city  thoroughfares. 

The  immediate  development  of  this  conception 
was  the  inauguration,  in  1831,  of  the  New  York  and 
Harlem  Railroad,  which  obtained  a  charter  to  oper- 
ate a  street-car  line  through  Fourth  Avenue  in  the 
city  of  New  York.  This  road  was  constructed  and 
opened  in  November,  1832,  Stephenson  building  the 
first  car  drawn  over  the  track.  If  a  duplicate  of  that 
car  should  be  made  to-day,  and  placed  upon  the 
street  of  any  city  in  the  Union,  it  would  attract  no 
less  attention  than  a  Roman  chariot.  Prior  to  that 
time  there  had  existed  only  two  forms  of  public  con- 
veyance. One  was  the  English  railway-coach ;  the 
other  was  the  American  omnibus.  Stephenson's  car 
was  a  combination  of  the  two.  Outwardly  it  resem- 
bled the  omnibuses  used  on  Broadway  until  a  few 
years  ago,  when  they  succumbed  to  the  more  con- 
venient and  comfortable  street-cars.  Its  exterior  was 
divided  hito  three  compartments,  after  the  English 
idea,  and  it  accommodated,  when  full,  thirty  passen- 
gers, or  ten  in  each  compartment,  besides  affording 
seats  to  perhaps  a  dozen  more  upon  the  roof.  Over 
the  second  door  was  painted  the  name  of  the  car, 
"John  Mason,"  after  the  gentleman  of  that  name, 
who  was  then  the  president  of  the  new  railroad,  as 
well  as  of  the  Chemical  Bank.  Upon  the  panel  of 
the  first  door  appeared  the  words  "  New  York  " ;  upon 
the  second, "  Yorkville  " ;  and  upon  the  third,  "  Har- 
laem,"  then  spelled  in  the  good  old  Dutch  way ;  and 
in  very  modest  letters,  upon  one  of  the  steps  be- 
tween the  wheels  of  this  extraordinary  vehicle, 
"  Stephenson  Patent." 

Although  this  first  of  all  street-cars  would  proba- 
bly seem  to-day  quite  as  ridiculous  as  the  famous 
"  one-hoss  shay,"  it  would  be  unjust  to  assert  that  it 
was  not  an  exceptionally  good  beginning.  Judging 
from  the  picture  now  before  me,  there  certainly  was 


141 


142 


ONE   HUNDRED   YEARS   OF  AMERICAN   COMMERCE 


a  dearth  of  springs ;  but  it  must  be  borne  in  mind  that 
springs  were  not  so  common  in  those  days  as  they 
are  now,  and  that  passengers  were  far  less  exacting. 
Moreover,  the  outward  appearance  of  the  car,  al- 
though cumbersome,  was  certainly  handsome.  The 
upholsterings  were  also  said  to  be  of  the  finest  ma- 
terial, and  conducive  to  a  sense  of  luxury.  Alto- 
gether, therefore,  it  must  be  admitted  that  John 
Stephenson's  first  car,  considered  by  itself,  was  a 
success.  Practically,  however,  it  proved  a  failure 
for  the  time  being.  Steam  had  just  then  begun  to 
be  used  as  a  motive  power,  and  all  other  agencies, 
including  this  wonderful  car,  were  superseded  by  it 
wherever  it  could  be  employed  to  advantage. 

In  1837  horse-car  service  on  Fourth  Avenue  was 
abandoned  for  steam-cars,  and  was  not  resumed  un- 
til 1845,  and  then  in  a  very  tentative  and  unsatis- 
factory manner.  In  1852  a  French  engineer,  named 
Loubat,  revived  the  idea  in  New  York  city,  and  a 
road  was  constructed  upon  a  portion  of  Sixth  Ave- 
nue. During  the  next  eight  years  about  thirty  roads 
for  horse-car  service  were  constructed  in  the  United 
States.  Of  these  probably  the  most  important  was 
the  one  built  from  Boston  to  Cambridge.  The  com- 
pany which  undertook  this  project  made  use  of  the 
old  omnibus  cars  that  had  been  used  on  Fourth  Ave- 
nue in  New  York.  As  the  traffic  increased  they  af- 
forded additional  facilities  by  placing  upon  tracks  the 
omnibuses  which  they  had  formerly  used  upon  the 
road  from  Boston  to  Cambridge.  It  soon  became 
apparent  that  the  new  form  of  conveyance  was 
destined  to  achieve  general  popularity,  and  one  im- 
provement after  another  was  adopted  until  there 
were  produced  really  very  comfortable  and  attrac- 
tive cars,  exactly  balanced  upon  the  best  of  springs 
and  handsomely  finished,  such  as  are  in  use  in  all 
of  the  large  cities  of  to-day. 

Aside  from  the  personality  of  the  inventor  there  is 
little  that  is  not  commonplace  in  the  history  of  street- 
cars operated  with  horses.  They  served  their  pur- 
pose as  a  process  of  development,  but  that  was  all. 
As  a  rule,  they  were  operated  by  separate  companies 
over  short  lines,  and  afforded  comparatively  little 
convenience  to  the  public.  The  transfer  system, 
which  has  since  attained  such  great  importance  in 
the  large  cities,  was  unknown,  because  of  the  sepa- 
ration and,  in  many  cases,  antagonism  of  the  various 
companies.  The  owners  of  the  roads  were  not  pro- 
gressive, and  instead  of  endeavoring  to  afford  the 
public  the  best  possible  accommodation,  they  exerted 
every  effort  to  obtain  the  largest  revenue  from  their 
properties.  This  short-sighted  policy  produced  the 
inevitable  result  of  popular  dissatisfaction.  Never- 


theless, there  soon  appeared  in  New  York  a  striking 
illustration  of  the  fact  that  street-cars  had  become, 
and  would  continue  to  be,  a  most  important  factor 
in  municipal  life. 

When  the  elevated  railroads  were  built  in  this  city, 
many  people  believed  that  the  end  of  the  surface  car 
had  come,  but  in  reality  the  companies  operating  lines 
directly  under  the  elevated  structures  suffered  com- 
paratively little  loss  even  at  the  beginning,  and  within 
a  few  years  they  had  regained  their  former  traffic, 
which  has  since  increased,  year  by  year,  until  it  is  now 
larger  than  ever  before  in  their  history.  The  chief 
cause  of  this  was  undoubtedly  the  increase  in  popu- 
lation, but  another,  hardly  less  potent,  lies  in  the  im- 
provement of  service,  the  change  of  motive  power, 
and  a  natural  tendency  of  the  public  to  prefer  sur- 
face transportation  to  any  other  method,  above  or 
below.  The  first  great  change,  and  the  first  really 
progressive  step  in  street-car  service,  however,  came 
with  the  substitution  of  mechanical  traction  for 
horses,  and  this  brings  us  to  the  second  chapter  of 
our  history. 

The  first  cable  railroad  in  the  United  States  was  a 
direct  result  of  physical  conditions  in  the  city  where 
it  was  constructed.  If  all  cities  in  the  country  had 
been  built  upon  marshes  and  bogs  like  Chicago,  St. 
Louis,  and  New  Orleans,  or  even  upon  moderately 
level  ground,  like  New  York,  Philadelphia,  and  Bos- 
ton, it  is  entirely  within  the  range  of  probability  that 
strands  of  wire  would  never  have  been  used  for  the 
purpose  of  drawing  street-cars.  But  there  existed  in 
San  Francisco  a  physical  configuration  of  ground 
which  made  it  impossible  to  transport  people  from 
one  part  of  the  city  to  another,  from  the  wharves  to 
Nob  Hill,  by  means  of  horses.  Necessity,  therefore, 
became  the  mother  of  this  invention,  as  of  most 
others,  and  the  native  Californians,  being  both  quick- 
witted and  enterprising,  were  not  slow  in  the  exercise 
of  ingenuity. 

To  Andrew  S.  Hallidie  belongs  the  credit  of  adapt- 
ing the  theory  of  cable  traction  to  successful  practical 
use.  In  1872  he  obtained  a  patent  upon  a  cable  grip. 
Meanwhile  he  had  prepared  plans  for  the  building  of 
a  cable  road,  and  far-seeing  capitalists  of  San  Fran- 
cisco had  pledged  the  requisite  financial  support  for 
its  construction.  The  work  was  pushed  forward  with 
the  energy  characteristic  of  the  far  West,  and  in  Sep- 
tember, 1873,  the  pioneer  cable  railroad  of  the  world 
was  put  into  operation  on  Clay  Street,  San  Francisco. 

Many  doubted  the  success  of  this  new  method,  and 
more  questioned  its  safety.  The  road  was  only  about 
a  mile  in  length,  and  yet  rose  from  a  low  level  ter- 
minus to  a  height  of  nearly  300  feet.  It  is  said  the 


ONE    HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


Ml 


first  gripman  who  operated  a  car  over  this  road 
alighted  at  one  stage  in  its  descent  and  insisted  that 
he  could  not,  in  justice  to  his  family,  proceed  further 
unless  there  should  be  attached  to  the  car  a  steel  rope 
above  the  surface  of  the  ground  which  he  could  actu- 
ally see  and  rely  upon  to  save  a  corporation  from  the 
payment  of  his  life-insurance.  This  difficulty  having 
been  overcome,  either  by  the  attachment  of  the  rope 
or  by  persuasion  and  threats  —  upon  which  the  his- 
tory of  California  is  less  specific  than  might  be  de- 
sired— the  car  continued  without  accident,  and  after 
a  few  days  a  service  was  given  of  sufficient  regularity 
to  make  certain  the  success  of  the  experiment. 

This  result  accomplished  one  immediate  effect.  It 
proved  beyond  a  question  that  heavy  cars  loaded 
with  people  could  be  drawn  by  cable  up  and  down 
the  steepest  grades,  without  the  expenditure  of  an  ex- 
traordinary amount  of  money,  and  without  menace 
to  the  lives  of  passengers.  Unfortunately  for  the 
quick  development  of  the  new  idea,  this  was  the 
only  problem  solved  by  this  first  cable  road.  It  was 
a  perfectly  straight  track,  containing  none  of  the 
curves,  depressions,  and  tortuous  routes  necessarily 
used  or  followed  by  street-car  lines  in  the  majority 
of  large  cities.  For  this  reason  the  experiment  at- 
tracted no  more  interest  than  that  which  for  several 
years  naturally  attaches  to  a  novelty ;  but  the  people 
of  San  Francisco,  daily  seeing  and  understanding  the 
merits  of  the  new  system,  appreciated  its  advantages 
over  the  old,  and  in  1876  supplemented  the  Clay 
Street  road  with  another  on  Sutter  Street,  and  three 
years  later  with  one  on  Union  Street. 

In  1882  Chicago,  either  from  jealousy  of  another 
western  city  winning  the  laurels  of  a  first  effort  in  any 
direction,  or  from  the  reputed  far-sightedness  of  its 
capitalists  in  taking  advantage  of  public  needs,  in- 
augurated a  cable  railroad  considerably  more  pre- 
tentious than  the  one  which  had  been  built  in  San 
Francisco.  Charles  T.  Yerkes  was  the  leading  spirit 
in  this  enterprise,  achieving  not  only  a  success  for 
the  city,  but  a  fortune  for  himself.  A  year  later, 
slow-going  Philadelphia  followed  the  lead  of  Chi- 
cago and  built  a  cable  railroad  two  and  one  half 
miles  in  length,  which  has  since  given  way  to  the  in- 
vincible power  of  harnessed  electricity. 

New  York,  more  conservative  than  any  of  its  sister 
cities,  and  notoriously  jealous  of  experiments  upon  its 
streets,  finally  accepted  the  tests  in  San  Francisco, 
Chicago,  and  Philadelphia  as  satisfactory,  and  au- 
thorized the  construction  of  the  present  cable  rail- 
roads on  Broadway  and  Third  Avenue.  Here,  for 
the  first  time,  was  introduced  the  duplicate  system 
which  has  since  become  a  practical  necessity  upon 


lines  where  traffic  is  heavy,  and  where  an  interrup- 
tion, even  for  the  fraction  of  an  hour,  is  extremely 
costly  to  the  operating  company. 

Other  cable  railroads  were  built  in  every  section  of 
the  country  except  New  England,  and  there  are  now 
in  operation  in  the  Eastern  States,  157  miles;  in  the 
Central  States,  252  miles;  in  the  Southern  States,  6 
miles;  and  in  the  Western  States,  2 1 7  miles; — making 
a  total  of  632  miles  of  cable  railroad  now  in  opera- 
tion, although  soon,  in  my  judgment,  to  be  super- 
seded by  the  more  tractable,  more  economical,  and 
less  objectionable  electricity.  If  this  prediction  should 
prove  to  be  correct,  it  is  obvious  that  the  invention  and 
use  of  the  cable  as  a  motive  power  deserves  no  more 
attention  than  it  has  received,  for  the  reason  that  it 
will  have  been  only  tentative  and  a  filling  of  the  gap 
between  the  quadruped  and  the  magic  fluid. 

Far  more  important  than  the  success,  however 
great  or  small,  of  this  method  of  traction,  was  the 
fact  that  its  discovery  led  directly  to  the  consolida- 
tion of  distinct  street-railroad  companies  in  such  a 
way  as  to  enlist  more  capital,  more  brains,  and  more 
energy  in  the  development  of  street-car  service.  Just 
as  the  primary  credit  for  introducing  the  cable-system 
belongs  to  Mr.  Hallidie,so  does  the  yet  greater  credit, 
so  far  as  practical  results  are  concerned,  of  working 
out  the  idea  of  efficient  consolidation,  belong  to 
Henry  M.  Whitney. 

There  were  at  that  time  innumerable  street-car 
lines  in  Boston,  operated,  as  in  all  other  cities,  as  sepa- 
rate organizations,  and  affording  accommodations 
wholly  inadequate  to  the  demands  of  the  public.  Mr. 
Whitney  conceived  the  idea  of  a  general  consolida- 
tion of  all  these  companies  in  such  a  way  as  to  make 
possible  the  substitution  of  a  better  form  of  motive 
power,  more  direct  routes,  and  a  general  improve- 
ment in  every  direction.  His  first  intention,  when 
he  had  accomplished  the  great  work  of  uniting  the 
many  adverse  interests  involved,  was  to  introduce 
the  cable,  but  before  he  had  fully  succeeded  in  his 
primary  undertaking  to  such  an  extent  as  to  warrant 
reconstruction,  the  most  important  event  in  the  his- 
tory of  street-railroads  took  place. 

Electricians  had  believed  and  asserted  for  years 
that  the  wonderful  power  to  the  adaptation  of  which 
to  practical  uses  they  had  given  much  intelligent 
study,  could  be  utilized  directly  in  the  drawing  of 
heavy  loads.  Edison  built  the  first  electric  road  in 
America  at  Menlo  Park,  New  Jersey,  in  1880,  and 
three  years  later  the  same  great  inventor,  cooperating 
with  Stephen  B.  Field,  built  a  similar  road  for  tem- 
porary use  at  the  Chicago  Exposition  in  1883.  Leo 
Daft  at  the  same  time  was  making  similar  experiments 


144 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


in  Baltimore,  Pittsburg,  and  other  places;  and  Charles 
J.  Vandepole  was  doing  likewise  in  Toronto.  None 
of  these,  however,  had  reached  such  a  point  that  its 
practical  value  was  demonstrated  beyond  a  doubt 
at  the  time  when  Mr.  Whitney  engaged  in  his  work 
of  consolidation  in  Boston.  But,  in  1888,  Frank  J. 
Sprague,  first  among  the  younger  electricians  of 
America,  obtained  sufficient  capital  to  make  an  actual 
test  upon  a  street  in  the  city  of  Richmond,  Virginia. 
He  brought  together  the  best  features  of  all  the  sys- 
tems which  had  then  been  devised,  applied  to  motive- 
power  the  fundamental  principles  which  he  had 
learned  in  building  electric-light  plants  and  estab- 
lishing stationary  motors;  added  new  and  simple, 
but  effective,  methods  of  motor-control  and  suspen- 
sion, and  in  general  worked  out  a  well-defined  system, 
the  essential  features  of  which  have  not  been  changed 
in  the  seven  years  which  have  elapsed  since  he  in- 
stalled the  first  practical  electric  railroad  in  the 
United  States. 

His  work  in  Richmond  naturally  attracted  the  at- 
tention of  men  engaged  in  the  street-railway  business, 
and  scores  visited  the  famous  old  Virginia  capital  to 
behold  its  actual  operation.  Among  these  were  Mr. 
Whitney  and  Messrs.  Widener  and  Elkins  of  Phila- 
delphia. They  appreciated  at  a  glance  the  possibil- 
ities of  the  new  invention,  and  after  making  most 
thorough  examinations  personally,  as  well  as  through 
expert  engineers  and  electricians,  did  not  hesitate  to 
adopt,  expand,  and  improve  it  in  every  possible  direc- 
tion. Mr.  Whitney  at  once  abandoned  the  idea  of 
laying  a  cable  under  the  streets  of  Boston,  and  began 
forthwith  to  lay  the  foundations  of  the  great  West 
End  system,  which  is  now  the  largest  in  the  world  in 
point  of  carrying  capacity  and  revenue.  Mr.  Widener 
and  Colonel  Elkins  proceeded  with  no  less  vigor  to 
consolidate  and  electrify  the  principal  lines  of  Phila- 
delphia, and  within  three  years  after  the  Richmond 
road  was  inaugurated,  there  were  hundreds  of  miles 
of  overhead  trolley-lines  in  successful  operation  in 
the  streets  of  nearly  every  large  city  in  the  Union. 

Since  that  time  the  work  of  changing  old  horse-car 
lines  into  modern  electric  railways  by  the  overhead 
system  has  progressed  so  rapidly  that  there  are  now 
in  actual  operation  in  New  England  1392  miles ;  in 
the  Eastern  States,  3189  miles ;  in  the  Central  States, 
3578  miles;  in  the  Southern  States,  743  miles;  and 
in  the  Western  States,  1461  miles ;  making  a  total  of 
more  than  10,000  miles  of  overhead  trolley-lines  now 
in  actual  operation,  against  less  than  2000  operated 
by  horses. 

It  will  thus  be  seen  that  the  development  of  the 
overhead  trolley  system  has  been  one  of  the  most 


rapid  ever  known,  in  a  change  so  radical  and  in- 
volving so  many  untried  elements.  This  has  been 
due  no  less  to  a  spirit  of  competition  among  rival 
electrical  companies  than  to  the  public  demand  for 
improved  facilities  for  local  transportation.  The 
two  or  three  large  companies  engaged  in  the  busi- 
ness of  furnishing  electrical  supplies  so  thoroughly 
appreciated  the  possibilities  of  the  new  method,  that 
they  invested  millions  of  dollars,  not  merely  in  the 
building  of  extensive  plants,  but  in  the  perfecting  of 
their  individual  systems.  The  inevitable  result  has 
been  the  concentration  of  an  abundance  of  ability 
and  energy  in  solving  the  difficult  problems  involved 
in  the  adaptation  of  electrical  power  to  this  most 
practical  of  uses. 

Under  this  stimulus  improvement  has  followed 
improvement  so  rapidly  that  little  apparently  re- 
mains to  be  achieved.  Cars  are  now  run  in  hun- 
dreds of  cities  by  devices  so  simple  that  skilled  labor 
is  no  longer  essential  to  their  operation,  and  they 
are  both  lighted  and  heated  by  the  same  current 
which  propels  them.  Moreover,  all  this  is  done  far 
more  economically  than  was  ever  possible  through 
operation  with  horses  or  by  cable.  Chief  among 
the  important  effects  of  electrical  operation  has  been 
the  building  of  roads  of  a  very  few  miles  in  length, 
which,  despite  their  limitations  of  both  district  and 
patronage,  can  be  and  are  conducted  at  so  small  a 
percentage  of  gross  receipts,  as  to  produce  a  fair 
profit  upon  the  investment. 

It  was  formerly  supposed — and  the  supposition, 
while  horses  and  cables  afforded  the  only  means  of 
motive  power,  was  correct — that  street-car  service 
could  be  used  to  advantage  only  within  the  limits  of 
a  city  or  village.  But  since  the  introduction  of  elec- 
tricity has  widened  the  possibilities  and  increased 
the  diversity  of  such  traffic,  it  has  been  found 
distinctly  profitable  to  connect  municipalities  and 
towns  having  common  interests  by  the  new  sys- 
tem. A  notable  illustration  of  this  fact  is  afforded 
by  the  great  success  of  the  trolley  road  connecting 
Minneapolis  and  St.  Paul.  Before  this  line  was  es- 
tablished the  steam  railroads  operated  scores  of 
trains  of  cars  between  the  two  cities  daily,  for  the 
sole  purpose  of  accommodating  the  local  traffic.  As 
soon,  however,  as  the  trolley  road  was  put  into  suc- 
cessful operation,  the  demands  upon  the  steam  rail- 
road decreased  rapidly,  and  have  gradually  been 
reduced  to  such  a  point  that  nearly,  if  not  quite,  all 
of  the  steam-railroad  trains  formerly  operated  for 
this  purpose  have  been  taken  off.  A  more  recent 
but  hardly  less  striking  illustration  of  the  same  tend- 
ency is  afforded  by  the  new  trolley  lines  connecting 


HERBERT  H.  VREELAND. 


ONE   HUNDRED   YEARS   OF   AMERICAN    COMMERCE 


Ufi 


Newark,  Elizabeth,  and  Jersey  City.  Indeed,  it  is 
now  an  established  fact,  that  on  distances  not  ex- 
ceeding ten  miles,  the  steam-road  cannot  compete 
with  the  trolley  because  of  the  more  frequent,  more 
cleanly,  cheaper,  and  more  pleasant  accommoda- 
tions offered  by  the  latter. 

The  most  recent  development  of  the  trolley  idea 
has  been  the  creation  of  an  entirely  new  traffic, 
namely,  that  of  riding  upon  street  cars  for  mere 
pleasure.  Few  people  appreciate  the  extent  of  the 
demand  for  this  branch  of  street-car  service;  but 
an  instance  is  afforded  by  the  fact  that  so-called 
"  trolley  parties "  during  the  past  summer  added 
more  than  seventy  thousand  dollars  to  the  receipts 
of  Philadelphia  companies  alone.  Street-car  man- 
agers themselves  have  only  begun  to  appreciate  the 
magnitude  of  business  which  may  be  created  by 
offering  exceptional  accommodations  for  pleasure- 
seekers,  and  the  development  of  the  idea  has,  con- 
sequently, only  begun.  That  it  will  become  a  de- 
cided factor  in  the  operation  of  trolley  lines,  espe- 
cially in  suburban  districts,  is  now  beyond  question. 

There  have  been,  and  always  will  be,  objections 
to  the  overhead  trolley.  Some  are  founded  upon 
reason,  but  more  upon  fancy,  and  it  is  a  fact  that 
in  the  great  majority  of  cases,  where  the  introduc- 
tion of  the  system  was  most  bitterly  opposed,  its 
removal  now  could  by  no  possibility  obtain  the  as- 
sent of  the  public.  Only  in  the  largest  cities,  where 
overhead  wires  of  any  description  are  objectionable 
because  of  the  density  of  population  and  the  serious- 
ness of  placing  any  obstacle  in  the  way  of  extin- 
guishment of  fires,  is  there  any  good  reason  for 
opposing  its  introduction  and  use.  These  objec- 
tions, and  the  natural  conservatism  of  the  commu- 
nity, have  prevented  the  adoption  of  the  new 
method  in  New  York  city.  The  direct  result  of 
this  condition  of  affairs  has  been  the  inauguration, 
during  the  past  few  months,  of  an  experimental 
railroad,  operated  by  electricity,  conveyed  through 
wires  strung  in  a  conduit  beneath  the  surface  of  the 
ground.  For  this  experiment,  which  now  bids  fair 
to  achieve  success,  the  far-sighted  directors  of  the 
Metropolitan  Traction  Company  are  entitled  to  full 
credit.  They  saw  the  necessity  of  overcoming  the 
objections  to  the  overhead  system,  and  at  the  same 
time  of  superseding  both  horses  and  cables. 

With  this  object  in  view  they  sent  to  Budapest, 
where  an  underground  system  had  been  in  opera- 
tion for  several  years,  Mr.  F.  S.  Pearson,  one  of  the 
most  capable  and  resourceful  electrical  engineers  in 
the  country.  Mr.  Pearson  made  a  careful  examina- 
tion of  the  system  there  in  use,  studied  the  condi- 


tions, climatic  and  otherwise,  which  would  make 
necessary  certain  changes,  and  finally  worked  out 
a  plan  which  he  submitted  to  the  directors  of  the 
Traction  Company,  with  an  assertion  of  his  belief 
that,  if  tried  properly,  without  an  attempt  to  save 
money  in  making  the  experiment,  it  would  prove 
successful.  The  road  was  constructed  upon  the 
lines  thus  suggested,  and  has  been  in  operation 
several  months  under  my  direction.  During  this 
time  no  accident  of  any  kind  has  taken  place,  and 
no  money  has  been  required  or  expended  for  main- 
tenance or  changes.  Although  far  more  expensive 
in  construction  than  the  overhead  trolley,  it  is  also 
far  more  satisfactory  in  operation  when  once  built. 
It  only  remains  to  be  seen  whether  this  system,  the 
success  of  which  in  fair  weather  has  already  been 
demonstrated,  will  be  found  capable  of  defying  the 
severe  storms  of  the  winter  and  spring  months  in 
northern  American  cities.  If  so,  it  will  undoubt- 
edly become  the  favorite  system  in  large  cities,  as 
it  comprises  all  the  advantages,  with  none  of  the 
disadvantages,  of  the  overhead  trolley  over  cables 
and  horses.  Storage-battery  systems  have  been 
tried  at  various  times  in  various  places,  but  so  fai 
have  met  with  so  little  success  that,  although  afford- 
ing apparently  the  ideal  system,  they  have  not  yet 
reached  the  point  of  efficiency  which  warrants  se- 
rious consideration. 

It  is  not  of  the  future,  however,  that  I  am  sup- 
posed or  would  presume  to  write,  and  regarding 
the  past,  all  has  been  said  in  detail  that  can  be  said 
within  limits  which  would  not  trespass  upon  the 
patience  of  the  reader.  In  summarizing,  I  can  only 
add  that  there  have  been  four  great  events  in  the 
history  of  the  street-railways  of  America  during  the 
past  seventy  years.  The  first  was  the  invention  of 
the  primitive  street-car  by  John  Stephenson.  The 
second  was  the  use  of  the  cable  by  Andrew  S.  Hal- 
lidie.  The  third  was  the  harnessing  of  electricity 
to  the  street-car  service  by  Frank  J.  Sprague.  The 
fourth,  and  most  important  of  all  in  actual  result, 
has  been  the  outgrowth  of  Henry  M.  Whitney's 
idea  of  consolidation,  which  has  resulted  in  a  benefit 
to  the  American  people  so  vast  as  to  be  incalcu- 
lable, and  in  the  investment  of  hundreds  of  millions 
of  dollars  in  an  industry  which  could  never  have 
been  created  or  imagined  in  any  age  other  than  that 
in  which  we  live.  As  an  interesting  and  valuable 
summary  of  the  magnitude  of  the  street-railway  busi- 
ness of  the  country,  I  present  the  following  tables, 
obtained  from  the  census  reports  of  1890  and  from 
other  equally  reliable  sources  of  a  much  later 
date: 


146 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 
COMPARISON  OF   STREET  AND  STEAM-RAILWAYS  IN  1890: 


STREET-RAILWAYS. 

STEAM-  RAILWAYS. 

PER  CENT.  OF 
TOTAL  STEAM- 
RAILWAYS. 

e  78-5  4.7 

Length  of  line  (miles)  . 

K7.7S8.83 

3  67 

25,665.00 

126  « 

70,764.00 

Employees   

704,743,00 

10.04. 

2  O23,OIO,2O2.OO 

Passengers  carried  

472.171,34.3.00 

A2o  4X 

DIVISION  OF  THE  MOTIVE  POWERS  OF  STREET-RAILWAYS  IN  1890: 


ITEMS. 

ALL  MOTIVE  POWERS. 

DISTRIBUTION. 

ANIMAL. 

ELECTRIC. 

CABLE. 

STEAM. 

Length  of  line  (miles)  ... 
Length  of  all  tracks  (miles) 

5»783-47 
8,123.02 

32.505 
70,764 
2,023,010,202 
$389,357,288.87 

4,061.47 
5,661.44 
22,408 

44,314 
1,227,756,815 
$195,121,682.50 

914.25 
1,261.44 
2,895 
6,619 
134,905,994 
$35,830>949-63 

283.22 

488-31 
5,089 
11,673 
373492,708 
$76,346,618.23 

524.06 
711.30 
2,113 
8,158 
286,854,685 
$82,058,038.51 

Employees    

Passengers  carried  

Total  cost  . 

NUMBER  OF  PASSENGERS  CARRIED  BY  STREET-RAILWAYS  IN  SIXTEEN  OF  THE  PRINCIPAL 

CITIES  OF  THE  COUNTRY   IN  1890 : 


CITIES. 

POPULATION. 

PASSENGERS  CARRIED. 

AVERAGE  NUMBER 
OF  RIDES  PER 
INHABITANT. 

Baltimore,  Md  

434,439 
574,232 
806,343 
255,664 
1,099,850 
296,908 
106,713 
132,716 
161,129 
242,039 

i,5  '5,301 
1,046,964 

343>904 
45i,77o 
298,997 
230,392 

40,659,982 

I29.°38,563 
147,500,399 
16,685,983 
180,326470 

37,905,370 
21,281,584 
38,000,978 

21,535,735 
30,510,662 
449,647,853 
165,117,627 
46,099,227 
67,800,252 
80,619,005 
31,032,187 

94 

225 

183 

l8;3 
164 

128 
202 
286 
I32 
126 

297 

I58 

'34 
150 
270 
135 

Boston   (including  Lynn  and  Cambridge),  Mass  

Brooklyn,  N.  Y. 

Buffalo,   N.  Y.  .        .    . 

Chicago,  Ills  

Cincinnati,  Ohio  

Denver,  Col  

Kansas  City,  Mo  

Louisville,  Ky  

New  Orleans,  La  

New  York,  N.  Y  

Philadelphia,  Pa  

Pittsburgh,  Pa  

St.  Louis,  Mo  

San  Francisco,  Cal  

Washington,  D.  C. 

COST  OF  CONSTRUCTION  PER  MILE  OF  LINE  OF  STREET-RAILWAYS  IN  1890 : 


ITEMS. 

ANIMAL. 

ELECTRIC. 

CABLE. 

STEAM. 

MIXED  AND 
INSEPARABLE. 

Total  cost  of  construction  and  real  estate  .  .  . 
Miles  of  line  to  which  this  cost  pertains  .... 
Cost  of  construction  and  real  estate  per  mile. 
Total  cost  of  equipment  

$99,812,886.27 
2,388.48 
$41,789.29 
$22  34A.28  Z  Id. 

$14,074,049.13 
463-70 
$30,351.63 

$33,374,627-39 
166.48 
$200,472.29 

$35»777»l87-o8 

350-3I 

$102,130.08 

$65,583,242.72 

734-12 
$89,335.86 

Miles  of  line  to  which  this  cost  pertains  .... 
Cost  of  equipment  per  mile  

2,473-56 
$Q  OT?  2C 

464.93 
$8  33  r  46 

361.83 

855-43 

Total  cost  per  mile  

$50,822  50 

H>**,J»37J'^5 

The  above  table  gives  a  comparative  summary 
of  the  cost  of  each  five  classes  of  roads  making 
completed  reports.  It  will  be  noticed  in  this  table 


that  cost  of  road  is  given  in  two  principal  items, 
viz.,  "Total  cost  of  construction  and  real  estate," 
and  "  total  cost  of  equipment." 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


147 


THE  CAPITAL  STOCK,  FUNDED  DEBT,  AND  ACCRUED  INTEREST  OF  THE  STREET-RAILWAYS 

OF  THE  UNITED  STATES  IN  1890: 


ITEMS. 

CAPITAL  STOCK 
ISSUED  AND 
OUTSTANDING. 

DIVIDENDS 
DECLAEED. 

RATE  or  DIVI- 
DENDS DECLARED 
(PEE  CENT.). 

FUNDED  DEBT 
ISSUED  AND 
OUTSTANDING. 

INTEESST 

AcCHUED. 

RATE  or  IN. 
TE«EIT  PAID 
(PE*  CEKT.I. 

All  motive  powers  

$163,506444.50 

$11,600,334.54 

7.09 

$103,494,259.99 

$5,870,7I0.7a 

$.67 

$62,415,614.50 

$4,390,519.54 

7.03 

$34,361,904.99 

$1,977,664.92 

«.8i 

Electric  

4,034,900.00 

225,697.00 

5.59 

3,230,300.00 

187,505.00 

;.8o 

Cable                     

6,437,900.00 

653,587.00 

10.15 

4,076,000.00 

2l8,l6o.OO 

C.7C 

Steam                   

25,917,180.00 

1,561,512.00 

6.03 

19,326,200.00 

1,181,512.00 

Sin 

Mixed  and  inseparable 

64,700,950.00 

4,769,019.00 

7-37 

42499.855-°° 

2,285.868.80 

5.38 

The  above  table  covers  only  those  roads  report- 
ing the  payment  of  either  dividends  or  interest,  as 
the  case  may  be. 

Now,  turning  from  the  facts  and  figures,  as  given 
by  the  census  reports  of  1890,  the  following  data, 
compiled  from  other  equally  reliable  sources,  are 
of  more  recent  date,  covering  the  years  1892,  1893, 
and  1894.  But  before  entering  upon  the  details  of 
the  same,  it  may  be  well  to  make  some  additional 
general  comparisons  between  the  street-railways  and 
the  steam-railroads  of  the  United  States.  The  former 
represent  about  seven  and  one-half  per  cent,  of  the 
mileage  of  the  latter,  and  in  passenger  receipts, 
about  forty-five  per  cent.  The  total  capitaliza- 
tion, bonds,  and  stocks,  of  the  steam-railroads  in 
the  United  States,  is  about  $11,000,000,000,  and 
of  the  street-railways,  about  $1,300,000,000,  the 
latter  being  about  eleven  per  cent,  of  the  former, 
while  the  profits  of  the  steam-railroads  were  $332,- 
000,000,  and  of  the  street-railways,  about  $43,000,- 
ooo,  thus  making  the  latter  about  thirteen  and  one- 
half  per  cent,  of  the  former. 

Of  the  976  operating  street-railway  companies 
reported  in  "American  Street- Rail  way  Investments," 
109  have  been  first  selected  as  presenting  the  most 
complete  reports  for  the  past  three  years.  They 
represent  about  twenty-two  per  cent,  of  the  total 
mileage  of  the  country — their  capital  stock  amount- 
ing to  $200,497,681,  their  funded  debt  to  $193,- 
844,145,  and  their  gross  capital  liabilities  to  $394,- 
341,826.  Their  capitalization  is  about  thirty  per 
cent,  of  the  total  capitalization  of  American  street- 
railways.  The  report  of  these  roads  is  as  follows : 


1893.  1893.  1894. 

Gross  receipts $56,119,612  $63,165,976  $57,232,545 

Operating  expenses 36,787,919    40,010,812    35,863,607 

Earnings  from  operation. $19,33 1,693  $23,155,164  $21,368,938 
Fixed  charges 8,834,282    10,373,510    11,118,217 

Net  income $10497411  $12,781,654  $10,250,721 


Per  cent,  operating  expenses  to  gross 
receipts  

Per  cent,  fixed  charges  to  gross  re- 
ceipts   

Per  cent,  net  income  to  gross  receipts. 

Per  cent,  net  income  to  capital  stock . . 


189*. 
65.6 

»5-7 

18.7 

5-2 


1193. 
63-3 


1*94. 
62.7 


16.4     19.4 

20.2         17.9 
6.4  5.1 


The  combined  reports  of  146  street-railroad  com- 
panies, representing  capital  stock,  $240,477,324; 
funded  debt,  $231,091,645;  capital  liabilities,  $471,- 
568,969 — or  thirty-six  per  cent,  of  the  total  liabili- 
ties of  the  country — make  the  annexed  showing  for 
the  years  1893  and  1894: 

1893.  1894. 

Gross  receipts $71,847,580        $65,791,187 

Operating  expenses 45,697,130          41,205,904 

Earnings  from  operation 26,150450          24,585,283 

Fixed  charges 12,281424          13,329,765 

Net  income $13,869,026        $11,255,518 


Per  cent,  operating  expenses  to  gross  receipts . 

Per  cent,  fixed  charges  to  gross  receipts 

Per  cent,  net  income  to  gross  receipts 

Per  cent,  net  income  to  capital  stock 


1893- 
63.6 
17.1 
19.4 
5-8 


1894- 
62.6 

20.2 
17.2 

4-7 


The  combined  operating  report  of  232  Amer- 
ican street-railway  companies — representing  capital 
stock,  $316,762,149,  funded  debt,  $278,995,755, 
and  capital  liabilities,  $595,757,904,  or  about  forty- 
six  per  cent,  of  the  total  capital  liabilities  of  the 
American  properties — make  the  showing  as  below 
for  the  financial  year  ending  June  30,  1894 : 

1894- 

Gross  receipts $84,664,338 

Operating  expenses 53.I75.278 

Earnings  from  operation $31489,060 

Fixed  charges 19,387,729 

Net  income    $12,101,331 

Per  cent,  operating  expenses  to  gross  receipts 62.8 

Per  cent,  fixed  charges  to  gross  receipts 22.9 

Per  cent,  net  income  to  gross  receipts 14-3 

Per  cent,  net  income  to  capital  stock 3-8 

The  mileage,  cars,  capital  stock,  funded  debt, 
and  capital  liabilities  of  the  street-railways  in  the 


148 


ONE   HUNDRED   YEARS   OF   AMERICAN   COMMERCE 


United  States — some  976  in  number — made  at  the 
beginning  of  the  present  year,  make  the  following 
showing : 


Aside  from  the  accommodation  afforded  the  resi- 
dents of  the  territory  through  which  the  roads  run, 
it  is  a  source  of  profit  to  the  railroad  companies. 


GEOGRAPHICAL 
DIVISION. 

NUMBER  OF 
ROADS. 

MILES  OF  TRACK. 

No.  OF  CARS. 

CAPITAL  STOCK. 

FUNDED  DEBT. 

CAPITAL  LIABILITIES. 

bj 

u 

K 

3 
• 

(j 

MISCEL. 

TOTAL. 

TOTAL. 

ft!  * 

TOTAL. 

PER  MILE 
TRACK. 

TOTAL. 

M 

TOTAL. 

u 

•I 

New  England  States  (i) 

104 

305 
278 
in 
178 

168 
567 
555 
214 
410 

I,3Q2 
3,l8g 
3,578 

743 
1,461 

157 
252 

217 

189 
J34 
213 
'43 

1,560 
4,102 

4,5i9 
1,176 
2,231 

5,5i9 
16,001 
16,936 
1,930 
4,359 

3-54 
3-90 
3-74 
1.64 
1.95 

$  53,778>3o° 
348,194,073 
222,641,025 

90,245,083 

$34,500 
84,900 
49,3oo 
28,200 
40,300 

$  43,546,000 
249,318,505 
173,567,500 
23,578,900 
62,114,600 

$27,900 
60,800 
38,400 
20,100 
27,700 

¥  97,324,300 
597,512,578 
396,208,525 
56,734,625 
152,359,683 

$62,400 

145,700 
87,700 

48,200 
68,000 

Southern  States  (4)  
Western  States  (5)  

976 

I»9I4 

10,363 

632 

679 

13,588 

44,745 

3.29 

$748,014,206 

$55,000 

$552,125,505 

$40,600 

$1,300,139,711 

$95,6oo 

(i)  Includes  M: 
District  of  Coir- v!- 


(4)  North  Carolina,  South  Carolina,  Georgia,  Florida,  Alabama,  Mississippi,  Tei 
Texas,  Colorado,  Montana,  Idaho,  Utah,  Washington,  Oregon,  and  California. 


As  to  the  recent  innovation — involving  the  pla- 
cing of  postal-cars  upon  street-railways — the  St. 
Louis  and  Suburban  Railway  Company  of  St.  Louis 
was  the  first  of  the  kind  in  this  country  to  make  the 
movement  in  this  direction,  by  running  from  the 
business  part  of  the  city  to  the  choicest  residence 
and  suburban  portions  of  the  town  of  Florisant, 
distant  sixteen  miles  from  the  center  of  the  city. 
This  began  several  years  ago,  and  was  followed  by 
Brooklyn,  over  the  Atlantic  Avenue  line  to  Coney 
Island,  in  August,  1894;  by  Boston,  in  April  or 
May,  1895;  by  Philadelphia,  to  Chestnut  Hill  and 
Passayunk,  June  i,  1895,  and  to  Manayunk,  Oc- 
tober i,  1895;  and  by  New  York,  over  the  Third 
Avenue  line,  October  i,  1895.  For  these  mail-cars, 
the  railway  companies  furnis